Namrata Kath Hazarika | 22 Feb, 2010
The textile industry does not see much growth opportunity in the country's rural market as there is slack in demand for apparel products, said industry experts.

Rakesh Vaid, founder chairman of leading Delhi-based export house Usha Fabs Pvt Ltd, and former Chairman of the Apparel Export Promotion Council, the apex body for export of readymade garments underscored that the requirement in the rural market for garment products is quite different from that in the domestic market (especially in the urban market). The garment manufacturing units do not produce products which can be sold in the rural market.

"The readymade garment manufacturers are usually producing products keeping in mind the requirement of western world. Indians in the rural market do not wear such products. We cannot find people in quantum wearing jeans in those remote areas. They are wearing dhotis and pyajamas," Vaid pointed out.

Recently, the Textile Minister, Dayanidhi Maran lamented that companies are not focusing on the domestic market, which is worth $40 billion.

Reacting to the statement made by the minister, Vaid stated, "What the government is talking is absolutely out of tune. The large exports factories which have been set up in the semi-unorganized sector and the rural market actually have a very complicated distribution network."

He further said that apparels those are manufactured by the garment industry are usually purchased by people who has got purchasing power. Rural market does not have buying power for the apparels manufactured by the garment units.

Government has to promote the rural sector. It is the duty of the government to make the rural sector efficient enough to purchase these products. The requirements which is in the western world is not in high-demand in rural market in India, he said.

D.K Nair, Secretary General of Confederation of Indian Textile Industry (CITI) opined that there is need to tap the rural market as this is one segments of the economy which has not been given focus by the textile industry.

"The textile industry is already present in the rural sector. But, the Indian garment industry does not have much presence in those areas," he said.

Nair mentioned there is scope if low price garments are manufactured and sold in the rural market. There is need for some strategies before exploring such markets.

"As we are aware that rural market does not have the purchasing power and the level of income is quite low there, we need to produce products which can be purchased by those segments," Nair said.

The rural sector must be able to afford to purchase the products, he added.

Vaid also highlighted that the government should promote the standard of living of the rural sector. He mentioned about the National Rural Employment Guarantee Act (NREGA) and requirement to promote this program intensively in the rural areas.

Setting up small companies in the rural sector (especially SMEs) will make things at ease for both the government and industry in rural India, he added.

Vaid said, "If big garment manufacturers belonging to the metropolitan cities start marketing in the villages, then we are creating major unemployment problem in the region itself. The rural market needs to come up with small companies especially SMEs which can produce products depending on the demand of the rural market. That is exactly done globally."  

"If I refer to my export industry, we are producing 20,000 above garments a day. We cannot think of going into the rural market. But, of course we have our presence in the Indian domestic market (i.e urban market). Unfortunately, the garment industry does not see much benefit via tapping the rural market," he added.

Commenting on the key export markets, Vaid said that once our original markets start picking up, the garment exporters would probably look for the US and Europe for greater benefits. As of now, tapping the rural market does not make sense as potential result will only be witnessed after a certain period of time. The garment industry will not drive results immediately by tapping the rural market.

The textile industry has to develop plans and marketing strategies for the rural sector, Accordingly, the industry has to fix the budget and even forecast how can exporters benefit from investing in such untapped markets. We cannot overnight start exploring the rural market, he added.

It was also pointed out by him that government should focus on developing the infrastructure and encourage more SMEs to set up units there.

Vaid also stressed that India's mass population has the most difficult body size and shape as compared to rest of the world. The size of clothes usually differs from person to person. The problem is also with the rural population in India.

He expressed that lots of scientific works need to be done for sizing in India.

When asked what kind of marketing strategies that can help the garment sector to expand in the rural market, Nair said, "The marketing strategies should be volume based. It should be low value and high volume garments which the rural market can afford. The strategy should be low costs but high volume and high turnover."

"We need to create the demand in the rural market, if we want generate profit. We need to manufacture products keeping in mind the requirement's of the sector. If there is no product produced for the rural market then there is no demand," Nair added.