PEST Analysis of Indian Market for the Apparel Industry

1. Political Factors:

The proliferation of international trade and liberalization of the global trade regime has dawned in India with the implementation of several programs by the Government of India (termed as GOI from now onwards in the report) to help the textile and apparel industry adjust to the new trade environment. In 2000, the GOI unveiled its National Textile Policy (NTP) 2000, aimed at enhancing the competitiveness of the textile and apparel industry and expanding India’s share of world textile and apparel exports to 10 per cent by 2010 from the current 3 per cent level. Some of these measures taken by the GOI were substantial to facilitate the Brand Accessory
It can be summarized that the Duties and Taxes for Tags and Stickers are as follows:
For tags - Central Excise is 8.24 %
For Stickers - Central Excise is 16.48 %
VAT - 4 %
CST – 3 % with Form C and without Form C – 10 % (However these can be avoided if the Garment manufacturer gives Form H which is for exports)
Above duties and taxes can be avoided if invoice is sent directly in Euros and supply of the materials is done in India or Outside India.

2. Economic Factors: With the economic restructuring and liberalization of the Indian Economy since 1990, India anticipates the fastest period of growth with long-term sustainable market expansion, higher manufacturing output and investment opportunities. Economic reforms brought by the GOI were initially centered on

• liberalizing procedures for industrial licensing and investment • Reduced role of public sector in the nation’s economy • lowering of import duties • easing import licensing requirements • relaxing controls on foreign direct and portfolio investment, and • improving operations of capital markets Economic Growth potential in India is projected to be 10 per cent in the near future, just as it was successfully lifted from 4.5 per cent in the 1980s to 6 per cent in the 1990s and 8 per cent levels by the end of the last century. Growth rate in 2007 was averaged to be around 9.2 percent and 9.6 per