Italy – A huge untapped market for India

By Sanjay Arora, Wazir Advisors (sanjay@wazir.in)

This month the country in focus for our analysis is Italy. One of the few European countries that is not only a consumer of textile and apparel, but is also an important manufacturer. In 2020, Italy exported textile and apparel worth US$ 30.7 bn. while imports for the same period stood at 25.3 bn. The trade balance for Italy has been positive for the last 5 years and displayed a positive growth between 2016 and 2019, while it observed a sharp fall in 2020 amid the Covid-19 pandemic. Readers should note that the analysis includes the trade data for 2020. The trade of PPEs is reflected across the trade data and the same will be mentioned wherever necessary.

Italy’s T&A – Import Scenario:

In, 2020, Other Textiles category (which mostly includes PPEs and mask) experienced a drastic increase of 264% and stood at US$ 4.7 bn. against US$ 1.3 bn. of last year. Overall, the market is dominated by Knitted apparels, followed by woven apparel with 35% and 27% share, respectively. China is the largest supplier with 31% share in Italy’s imports. France and Germany are distant second and third respectively with 6% share each. The top 5 exporters China, France, Germany, Turkey, and Spain together account for around 53% of the T&A imports to the country. India was the tenth largest supplier of textile and apparel to Italy.

Apparel accounts for 62% of the total textile and apparel imports of Italy. Knitted apparel was the largest imported category in 2020 with a share of 35% followed by woven apparel at 27%. Fibre, filament & yarn, and Fabrics accounted for 27%, 15% and 14% share, respectively. T-shirts, Shirts, Jerseys, Non-woven overalls (PPEs), Trousers and Shorts were among the top 10 imported commodities of 2020 for Italy.

India’s Textile and Apparel exports to Italy: India’s exports to Italy have fluctuated over the last 5 years

For India, the Italy is the ninth largest market for Textile and Apparel. India’s exports to Italy stood at US$ 745 mn. in 2019, while the same was US$ 564 in 2020. India’s share in Italy’s textile and apparel imports in 2016 was 6%, the share has declined to 2% in 2020. Among the T&A commodities imported from India, apparel holds the majority share of around 59%, followed by Other Textiles (Nonwovens, PPE, etc.) and Home Textile with 18% and 10% share, respectively.

Considering the fact that Italy is both a consumer of apparel as well as textiles, India has a huge potential of increasing its market share. Looking back at India’s 6% share in 2016, India needs to work on a few key categories to regain its share. While continuing the existing categories of apparel, Indian exporters should focus on Women’s woven cotton trouser, T-shirt, and Men’s woven cotton shirts. These categories have significant demand in Italy while India is also globally competitive for these products. On the textile side, Italy has significant weaving and garmenting capacities and India should continue its high exports of cotton yarn while focusing on new categories such as woven synthetic fabrics as well as knitted fabrics and synthetic yarns.

The EU currently grants preferential trade benefits to 47 Least Developed Countries (LDCs) which benefits India’s neighbors such as Bangladesh, Myanmar, and Cambodia. India on the other hand attracts a higher import tariff even considering the 20% duty relaxation on import duty for Indian apparel that enter EU. To mitigate this threat from other competing nations, India is actively in talks with EU for a Free Trade Agreement. Wazir Advisors, your trusted business advisor in Textile and Apparel sector can assist you in strategy formulation and implementation, forming alliances and joint ventures, investments, market understanding, sector analysis and due diligence, thereby providing end-to-end solutions spanning the complete business cycle in textile value chain. Wazir can also help you in understanding and strategizing your business to align well with the Italian Textile and Apparel market.