Vietnam, India outpace Bangladesh in high-value apparel exports to US: Report

Infographics: TBS

In the competition to capture a larger share of the US apparel market, which China is gradually losing, Vietnam and India are surpassing Bangladesh, particularly in high-value garment exports, according to a report by the United States International Trade Commission. 

Exports of the two countries are rising due to their growing focus on high-value apparel exports, better infrastructure, and increased foreign investment, said the report titled "Apparel: Export Competitiveness of Certain Foreign Suppliers to the United States". 

As China's dominance wanes, other countries, including Bangladesh, Vietnam, and India, have expanded their presence in the world's largest apparel market, said the report released on Monday.

It said China's share of US apparel imports by dollar value fell from 37.7% in 2013 to 21.3% in 2023. In contrast, Vietnam's share increased from 10.0% to 17.8%, while Bangladesh's rose from 6% to 9%.

India's market share grew from 4% to 5.3%, while Pakistan's increased from 1.9% to 2.6%. Both countries focus on cotton-based apparel and benefit from vertical integration, locally sourced materials, and large-scale production.

Besides, as US companies diversify away from China, many have turned to Vietnam for its advantages in supply chain efficiency and production capacity, the report said.

The report further notes that Bangladesh, while specialising in cost-effective cotton knitwear such as jeans and T-shirts, still faces challenges in competing with Vietnam and India in high-value product segments.

The country's reliance on imports for man-made fibre (MMF) inputs and logistical limitations have also hampered its competitiveness. Besides, Bangladesh's reputation for social compliance, particularly concerning labour practices, remains low.

However, Bangladesh remains an essential supplier to the US, exporting $7.1 billion worth of apparel in 2023, up by $2.3 billion from 2013.

The report, which reviewed the unit prices of apparel from the top ten exporting countries to the US, said Bangladesh ranks as the second-lowest in apparel export prices after China.

Although Bangladesh's exports have increased over the past decade, they remain nearly half of those of Vietnam, which holds the top position. 

During this time, India has risen from sixth to third place in US apparel exports, while Cambodia has moved up from eighth to sixth.

Vietnam, Cambodia

Vietnam has become a strong competitor in the apparel market due to its efficient supply chain management, large-scale production, and business-friendly environment, said the report. 

It offers low costs, flexibility, and quick market access, supported by a large, young labour force and good transportation infrastructure. Besides, its economic and political stability enhances its appeal compared to other Asian competitors.

Cambodia has also seen growth in US apparel imports, with its market share rising from 3.2% in 2013 to 4.3% in 2023, thanks to its proximity to China and Vietnam and favourable sourcing costs. 

India, Pakistan

The US is India's largest export market, making up 32.0% of India's $14.5 billion in global apparel exports in 2023, said the report. 
Indian apparel producers focus on high-value items, such as hand-embroidered products, and have nearly complete vertical integration, sourcing over 90% of raw materials domestically. 

The US report said geopolitical risks are a major reason why Pakistan is not a larger apparel supplier to the US market. Key concerns include safety issues in the region and perceptions that travelling to Pakistan is difficult and unsafe. 

However, some firms that source from Pakistan report good service and no security challenges.