Retailers Wal-Mart Stores and Gap and clothing manufacturers
Levi Strauss and VF Corp are looking increasingly to India for denim, which could make the nation the global hub for denim production. China, once the powerhouse of denim production and supplier of close to 3 billion meters of denim annually, is facing production decline as a result of stagnant cotton supplies caused by flooding. The country has had to tap into its cotton reserves, which have declined to 1.3 million metric tons from an optimal reserve of 2 million metric tons.
This scenario presents a great opportunity for Indian denim producers to increase production from current annual levels of 650 million meters. In addition, during the last couple of months, Bangladesh has been plagued by labor unrest and riots, prompting Wal-Mart and other retailers to shift denim production to India.
Arvind Mills, one of the largest manufacturers of denim fabric in India, has been one of the main beneficiaries. The company has seen a 13 per cent jump in its denim business in the current fiscal year due to aggressive buying by companies like Wal-Mart, Gap and Levi’s. The company, which currently supplies around 70 million meters of denim fabric a year, expects to produce an additional 10 million meters for large retailers in the current quarter.