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After being outpaced in recent years by neighbouring Bangladesh and then hammered by the COVID pandemic, India's garment factories are now humming near full capacity - a rare labour market bright spot for Prime Minister Narendra Modi and his ruling party as they head towards an election in The company is scouting for land to add new factories around its main production base in Hindupur, about km 60 miles north of tech hub Bengaluru.
Still, some industry leaders said that unless India signed free trade agreements with Western countries - which New Delhi says it is working on - it would not be easy to outsell Bangladesh, which also enjoys preferential export terms from many buyers as a least developed country. Two industry sources with knowledge of the matter said both Fast Retailing's Uniqlo and Gap Inc were in talks to expand purchases from India.
The companies, who source from India mainly from the country's biggest garments exporter Shahi Exports, did not immediately respond to requests for comment. Shahi Exports Managing Director Harish Ahuja declined to discuss individual buyers but said demand was high from its existing customers.
One factor behind the surge in sales for Indian companies to the United States and Europe in the past few quarters has been alleged rights abuses in China's main cotton growing province of Xinjiang, where the minority Muslim Uyghur community lives. President Joe Biden in late December signed into law legislation that bans imports from Xinjiang. China has rejected accusations of forced labour or any other abuses in Xinjiang.