Prof. D. Mukherjee
mukhopadhyay.dinabandhu@gmail.com
India’s textile and apparel industry, one of the country’s oldest and most employment-intensive sectors, stands at a decisive turning point. Historically renowned for its craftsmanship, abundant raw materials, and export strength, the industry now grapples with declining global competitiveness arising from weak cost management and absence of institutionalized cost-control systems. In contrast, nations such as Bangladesh, Vietnam, China, Italy, Turkey, and Germany have made scientific cost management central to their industrial strategies, achieving sustained efficiency and profitability.This discourse aims to articulate a policy and operational framework that embeds cost management discipline across the entire textile value chain-from fibre production to finished apparel. In today’s price-sensitive global market, where international buyers determine prices, profitability depends not on price escalation but on systematic cost optimization. Cost, therefore, emerges as a strategic determinant of competitiveness, productivity, and sustainability.True cost competitiveness cannot be achieved through financial investment alone; it demands synergy among professional expertise, digital cost intelligence, and supportive public policy. The Institute of Cost Accountants of India (ICMAI), a statutory body constituted under the 1959 Act of Parliament, is uniquely positioned to drive this transformation. Leveraging its network of skilled cost and management professionals, ICMAI can guide textile clusters, MSMEs, and major enterprises in adopting modern cost systems, generating actionable data, and linking operational performance with measurable efficiency outcomes
According toMinistry of Textiles, Government of India, November 7, 2024 , Annual Report 2023-24, the textile and apparel sector remains one of India’s most labour-intensive and export-oriented industries, contributing around 2.3% to India’s GDP and employing over 45 million people . However, India’s global share in finished garment exports has stagnated, while nations such as Bangladesh, Vietnam, and China have gained market dominance. Despite having a statutory professional body of cost specialists-the Institute of Cost Accountants of India (ICMAI)-the country has not effectively leveraged scientific cost management for competitiveness (ICMAI, 2024).Cost management extends beyond accounting; it provides actionable intelligence for strategic decision-making and competitiveness in price-sensitive global markets. This paper explores how managerial neglect, weak institutional utilization of cost professionals, and governmental indifference to scientific cost management have undermined India’s textile competitiveness.
India’s textile history is globally renowned-from pre-colonial handloom exports to post-independence industrial expansion. By the mid-20th century, India was among the world’s largest textile producers. However, despite having a strong cotton base and skilled workforce, the industry’s global export performance has stagnated. As per the Annual Report 2023-24, textile and apparel exports totalled approximately USD 35.87 billion in FY 2023-24, down from USD 36.69 billion in FY 2022-23 (Ministry of Textiles, 2024).Fragmented MSMEs, limited automation, and under-developed cost engineering systems have constrained efficiency. The overemphasis on capital support, rather than management transformation, has slowed competitiveness gains.
Bangladesh, Vietnam, and China have capitalized on cost efficiency and policy consistency. According toBangladesh Garment Manufacturers and Exporters Association(BGMEA), 2024. Report, Export Performance 2023-24Bangladesh’s RMG exports reached USD 38.48 billion in FY 2023-24, supported by scale and buyer partnerships . Again, Vietnam National Textile and Garment Group (Vinatex) December 28, 2024 reports that Vietnam’s Textile Industry on Track to Achieve US$44 Billion Exports in 2024. Vietnam’s exports are projected to hit USD 44 billion in 2024 owing to target costing and FDI-driven modernization . Further, China Customs (General Administration of Customs, PRC, (2025, January Report) -Major exports by value and quantity: Textile and apparel statistics 2024 supports China’s market leadership which remains unmatched, with USD 301.1 billion in exports in 2024, reflecting vertical integration and advanced cost control as reported by TexLeader China Textile News. (2025, January 21) when India’s relatively higher operational costs, longer lead times, and lack of cost-analytics adoption weaken her price competitiveness as per Ministry of Textiles, Government of India report May 5, 2024 read with Export Promotion for Textiles and Apparel Sector – Policy Note. New Delhi: Government of India, Ministry of Textiles, 2024.
Scientific cost management integrates operational and financial data for precision decision-making. Techniques such as Activity-Based Costing (ABC), Time-Driven ABC, and target costing identify non-value activities and improve cost transparency. Vietnam’s buyer-supplier target costing ensures profitability even at fixed prices (Vinatex, 2024). Bangladesh’s clusters deploy standardized cost reporting to maintain consistent margins (BGMEA, 2024). China’s use of enterprise resource planning (ERP) and manufacturing execution systems (MES) provides real-time cost analytics (China Customs, 2025).These nations view cost information as a performance metric-the primary determinant of competitiveness when price is market-set.
Why the Indian textile industry suffers from cost-efficiency woes to multiple factors and constraints but addressing and resolving the related issues to bringing about and improve efficiency are hardly observed to be in place. Despite the ICMAI’s statutory mandate (ICMAI, 2024), Indian firms rarely employ qualified cost professionals in strategic or production roles. Managerial inertia, fragmented supply chains, and absence of cost-centric KPIs undermine cost transparency. Government schemes tend to fund capital upgrades rather than measurable cost improvements (Ministry of Textiles, 2024). Weak enforcement of cost audits and minimal digital costing adoption further impede competitiveness.It is worth pursuing the global case studies of cost management success at this juncture and as few glaring instances , let us refer to China- vertically integrated production and digitalized costing systems helped achieve USD 301.1 billion in 2024 textile exports (TexLeader, 2025). Again, Vietnam- buyer-anchored FDI and lean manufacturing propelled exports to USD 44 billion (Vinatex, 2024) and lastly say Bangladesh- cluster specialization, buyer financing, and shared utilities kept unit costs among the world’s lowest (BGMEA, 2024).These models highlight how embedding cost analytics within production ecosystems ensures global competitiveness.
Of late government India has begun to contemplate strategizing cost management road map for the textile sector and align it with global benchmark as a reactive measure when India is observed to have been noticeably losing the stake to the global competitors such as China, Germany , Italy , Bangladesh, Turkey, Vietnam , Pakistan armoured with competitiveness .
India’s recent initiatives aim to modernize textile clusters and logistics. Provisional FY 2024-25 exports (April-October) reached USD 21.36 billion (PIB, 2025). Yet, most schemes emphasize infrastructure, not cost governance. The Ministry’s programs lack standardized cost-reporting frameworks or formal ICMAI participation (Ministry of Textiles, 2024b). Without integrating professional cost oversight, roadmaps remain capital-intensive but management-weak.
The most important phase strategy is implementation i.e. making the cost roadmap work efficiently. For India’s textile sector to regain its competitive edge, the forthcoming cost roadmap must move beyond being a policy statement and become an institutionalized framework embedded across all operational levels. Central to this transformation is the empowerment of the Institute of Cost Accountants of India (ICMAI) as the statutory technical partner responsible for guiding and supervising cost optimization initiatives within textile clusters. By involving the ICMAI, the government can ensure that scientific cost management principles are applied consistently and that industries receive professional guidance in designing cost systems suited to their production realities.
Equally important is the introduction of standardized cost-reporting templates that capture key indicators such as unit cost, yield losses, and cost-to-serve metrics. Such uniformity will create a reliable data infrastructure, allowing policymakers and industry leaders to assess performance and identify inefficiencies with greater precision. Establishing Cluster Cost Centres, equipped with shared digital costing tools and training modules, will further support smaller enterprises in adopting modern cost-management systems without incurring prohibitive expenses.
To ensure meaningful adoption, government incentive schemes should be tied to verified cost-reduction outcomes rather than generic production or export targets. Linking fiscal support to measurable improvements will promote accountability and foster a results-oriented culture within the industry. Moreover, the roadmap should promote collaborative buyer-supplier relationships that embrace target costing models, similar to the practices followed successfully in Vietnam and Bangladesh (Vinatex, 2024; BGMEA, 2024). These partnerships align cost objectives throughout the value chain, ensuring that profitability is achieved even under fixed global pricing conditions.
Finally, robust monitoring mechanisms must be instituted through independent cost audits and national digital dashboards. These systems will provide real-time visibility into cost efficiency, track industry-wide progress, and maintain the integrity of data used for decision-making. Only through such a comprehensive, professionally guided, and transparently monitored approach can India’s cost roadmap translate from concept to competitive advantage.Reform must embed cost management institutionally in order to achieve objective government’s initiative .Empowering cost management professionals is vital for achieving ‘Vikshit Bharat 2047.’ India’s textile revival depends on embedding scientific cost discipline through ICMAI’s professional integration into industrial policy. Mandating cost audits, incentivizing verified efficiency gains, and institutionalizing cost reporting will transform India’s raw-material advantage into sustained competitiveness. In a price-driven global market, profit hinges on cost control. Establishing cluster cost centres, digital costing tools, and data-driven monitoring can create a unified national cost-management framework. This strategic approach will enhance exports, generate employment, and reposition India as a globally competitive textile leader founded on innovation, efficiency, and cost excellence.
(The columnist is a Bengaluru based educationist and management scientist)
Follow our WhatsApp channel
