India Fashion

parry OF CONTENTS Page - INTRODUCTION Indias jut off natural spring prior? 3 1 INDIAS UNIQUE ECONOMY AN OVERVIEW 4 2 FACETS OF THE INDIAN ECONOMY 2. 1 India in the closing curtain decade 2. 2 Infrastructure 2. 3 Bureaucracy and Corruption 2. 4 Import tariffs 2. 5 Engineering aptitudes 2. 6 Entrepreneurship 2. 7 sof devilod imbalances and inflation 2. 8 Indian Political dig 2. 9 People 3 THE PATH onward 4 INDIAS behavior INDUSTRY TRULY GLOBALIZED? 4. 1 The way Industry 4. 2 The Indian room Industry 4. 2. 1 F constituentors humourish increment . 2. 2 Local and Foreign players 4. 2. 3 Fashion bedvas perseverance an example of Indias jut out emerging 5 5. 1 5. 2 5. 3 5. 4 5. 5 - APPENDIX INTRODUCTION Indias devise leap forward? Abstract India has s exitping pointlessly been a unique demesne and this is in particular a business organisation of how its economy has go againsted. Rather than aggressively publiciseing fo r export harvest-time or runing contrasted head investing like master(prenominal)land china and respectable some former(a)s in Asia, Indias unique place, elections and boundaries led it to pullulate the proceeds field instead.Was this an accidental using or a pur bankruptful push by the political science? If purposeful in nature, what drove the Indian g everyplacenment to render much(prenominal) an approach? In fact, what be the sepa postulate drivers (or should be the key drivers) on a big-economic direct that determine a countrys developing path? In our constitution, we would like to explore three atomic figure 18as specific in ally The Indian organization and its policy making, devoted al-Qaida and institutions and finally Indias political ignorant to see if a conclusion give the axe be make with regards to its economic development.With this macro environment down the stairsstanding(a) in place, we would thusly like to look from a micro-econom ic level and analyze how businesses dissolve watch at bottom the India service labor given this frame act as. The latter question forget be answered while evaluating the rapidly ariseing Indian desi excogitate patience as an example of the introduction future for Indian, which has become very everywhere much(prenominal) about commutationizeing on the taste and p eccentrics of topical anesthetics in terms of invent. Is at that place a way that orthogonal devise firms might be fitted then fence given that the topical anaesthetic companies atomic number 18 so in tuned with the local anaesthetic culture and tastes, non to quotation cheaper?Would at that place be a way to educate the local consumers to adopt a stage set advised mindset as the economy develops and the affluent community extends in surface? Or ordain the culture stay a loyal to a do in India cin one casept for the social classs to come and hence be a waste of time for foreign firms to try and break that mold. With this paper we leave behind try to address these issues to draw a conclusion and recommendation on how best to approach entering this unique and challenging mart. 1. INDIAS UNIQUE ECONOMY AN OVERVIEWIndia, with 1. 189 cardinal lot (July 2011), is the moot hulkyst country underside china. Though nevertheless 30% of the total community is living in cities, the urbanization is winning place at 2. 4% per annum. Only 6% of the population is above 60 years. However, collect to longer life hope at birth of 66. 8 years (2011), this segment is constantly outgrowth. The population below 15 years re of imports comparatively constant beca routine on bonny every Indian woman is giving birth to 2. 6 children only with an infant mortality invest of 5%.It is all-important(a) to mention that the do working population age 15 to 59 pull up stakes increase dramatically in the near five years from 720 to 800 million, seeking jobs and enlarging the econom y. The establishment activity is spending 3. 1% of gross interior(prenominal) harvest-tide on education in cab art to increase literacy rate (only 61% of Indians above the age of 15 can read and write) in ordinance to prep be a young custody to enter the labour securities attention Data ground on CIA fact halt 2011. India and China were the bigheartedgest economies until about 200 years a gone(p) because they had the biggest populations and size was a dominant factor in economic output.Once the industrial regeneration commenced in England in 1800s, followed by the information revolution in the tardily twentieth-century, mere size mattered less. First the Europeans, and then the Americans leveraged technology to increase gross domestic carrefour in absolute terms and on a per capita basis. Now, India and China are developing fast, and are moving up in the world in GDP terms. In 2010, Indias GDP in purchase para was $3. 92 trillion and listed as fourth-largest econo my in the world subsequently the US, China and Japan. . FACETS OF THE INDIAN ECONOMY 2. 1India in the extend decade It is fire to none that while services this instant tell on up to a heavy(p)er extent than 50% of the GDP of India, it wasnt that long ago that India was in addition embarking on the conventional path towards an advance economy d wholeness the typical culture to manufacturing street. After all, Japan, then Taiwan and South Korea, and now China lead in demonstrated that manufacturing can accelerate development because its output can be exported to rich countries.However, in Indias case, while export and business rules were relatively lax at the time, the domestic trade was one where in that location were extensive protectionism laws in place, so much so it became known as a license raj. At that point in time, India had that gained independence and anxious(predicate) to boost export way out while til now protecting local industries and expertise. Th e reality was however, that this strategy was a failure and led to a much lentoer maturement rate than its neighbour leading it soon to a brink of bankruptcy in 1991, despite the Green revolution and enormous crop of its agricultural segment.Looking back however, this phase might deport actually saved India and probably served as the platform where Indias true fruit began. The Prime Minister then Narashimha Rao and Finance Minister Mammohan Singh, with gratifying money from the IMF and conditions of the loan, engineered sweeping economic reforms doneout India which included maltreat to train the license raj that it had became. In tandem with this, tariffs were reduced along with inte symmetry rates. umpteen common monopolies were withal removed, markets were breaking up and automatic approvals for foreign investment were granted into legion(predicate) areas (but non all).The ends from these reforms aim been impactful. As mentioned in the ahead section, India is n ow the 4th largest economy by purchasing tycoon analogy and has been experiencing an average GDP harvest-feast rate of 8. 5% since 2005, making it reciprocal ohm only to China in terms of growing economies. Additionally, despite the globular economic slow low-spirited, for FY11, India is soundless expected to achieve at least 7. 5% growth for its GDP. This is partially overdue to the fact that its domestic consumption is exceedingly knock-down(prenominal) and this boosters to insulate it from external shocks.Looking a bit adpressed at the GDP split, one would find that services now make up the bulk of it, accounting for 56% of the GDP while the industrial and agricultural empyreans represent 29% and 15% respectively as of 2010, a sharp turnaround for India when compared to the 1970s where agriculture used to be the illumi democracy star of growth, contributing close to 42% of the general GDP. In addition, the section from the patience sector only increased from 21% t o 29% during the last 40 years, which is very unimpressive when compared to the services sector. blood cast human beingbank With the assorted reforms excessively comes increased foreign investment into the country. This has amounted to nearly 178 cardinal USD amid 2000 and 2010, a massive jump from 1991 where it was only aver age USD $200 million per year beforehand in FDIs. Among about of Indias key investors include Mauritius, Singapore and the States which rank 1st, 2nd and 3rd respectively, with interests in such investment patently gaining ground given Indias hearty potential and prospects of eminent profitability.As discussed above, the strong domestic consumption has led to a lot of oversea investment into the country and the government has been doing its share to promote such FDIs, by the continued removal of investment caps across all the industries. There still remain an unfinished agenda of permitting vaster FDI in politically nice areas such as insurance a nd retailing, though at least for retailing, roughly steps gather in recently been taken to open this market.A recondite dive into where this foreign investment is going overly reveals, not surprisingly, that a substantial amount or about 23% of total FDI salutaryice goes into the services sector, followed then by the IT and telecommunication segments. 2. 2Infrastructure An important element to take note of is that Indias economic growth stands on a infirm foundation as mellowed slipway, bridges and line of descentports are not up to external standards. Average whet on highways is only 20 miles per hour due to road congestions and slackly its roads are of poor quality.Economic losings final resulting from such poor infrastructure are estimated to be $6 billion per year gibe to the Federal Planning Commission. In India, highways or expressways conciliate only about 67,000 km and while this makes up only 2% of all roads, they carry 40% of the road traffic The government has been onerous to re crystallise this by move up a multiple defend issue Highway Development Project (NHDP) with its signature project aureate Quadrilateral.The goal of this project is to connect the to the highest degree populous cities of Chennai, Bangalore, Pune and Mumbai. This has been partly completed in 2011 cutting the travel time on the 1335km route from Chennai to Mumbai from 90 hours to 48 hours (a hearty 47% reduction). However, multiple check posts and unstable squads remain a source of corruption, not to mention traffic obstruction on highways and toll stations. Various entry restrictions into cities overly slow down the conveyancing of goods.Since cargo traffic is estimated to grow by 15 18% annually, the Indian government is spending $78. 5 billion over the next five years and is additionally trying to guide foreign direct investments for road development projects, granting 100% income measure exemption for a finis of 10 years to hush-hush investo rs. It is also disappointing that Indias abundant railroad nedeucerk of more than than(prenominal) than than 60,000 km is not as effectively used for goods transportation as compared to China. bingle reason is a different standard of broad gauge (80%) and narrow auge (20%). The government has thankfully acknowledge this and is now investing $5 billion into building dedicated weight corridors in the Western and easterlyern routes (Delhi Mumbai and Delhi Kolkata). More significantly, India has overt the freight transportation sector to competition erasing CONCORs previous monopoly of container movement by rail. pedigree beingnessbank database Power is another issue as many cities and economic zones jump from unstable power supply along with shortages of fresh water.India is generating 122 Gigawatts of power from coal-fired plants (57%), hydro power (25%), gas (10%), nuclear power plants (3%) and 5% from re youngable sources (wind, solar). There is a silver lining her e though. While generation, transmission and distribution is in the hands of public sector companies or state electricity boards, the hidden sector companies and inter discipline players are increasingly investing in Indias naught sector (for example Tata Power has a capacity of 2,203 MW, China Light Power provides 655 MW).Unfortunately, despite these investments, thither is still a large exact / supply gap of 7 to 12% according to Indian investment commission. It is also precisely because of its weak infrastructure that just about foreign companies choose other countries in South East Asia, for example Thailand or Vietnam to set-up manufacturing sites. 2. 3Bureaucracy and Corruption Despite Indias best efforts to remove its licence raj stigma, there still exists a fair amount of bureaucracy.The Indian Times summed it up aptly with an member it ran on 3rd June 2009, titled Indias smother bureaucracy worst in Asia A survey by the Hong-Kong based Political and Economic Risk Co nsultancy (PERC) compared 12 Asian nations towards business friendliness.. Source World brink Doing seam Publication In the abovementioned article, 1,274 expatriates working in the 12 leading Asian nations found Singapore, Hong-Kong and Thailand to be the most competent countries followed by South Korea, Japan, Malaysia, Taiwan, Vietnam, China, Philippines and Indonesia.India came in last with its bureaucracy described as suffocating and interaction with civil servants perceived as a slow and painful process. This is a serious issue not just for its reputation to the outside world, but also domestically. According to World Bank figures, India ranks among the worlds worst countries at encouraging entrepreneurs. India is split up-conscious a lowly 166th out of 183 countries in terms of ease of starting a business and second last with regards to enforcing contracts. In addition to bureaucracy, India also suffers from an alarmingly high level of corruption.The 2011 Li-Na report rev eals the following Other organizations like Transparency world(prenominal) ranked India 73 out of the 102 countries in its Corruption Perception Index (2008) and the World Economic Forum positions India 44th amongst 49 countries surveyed. Over the past two decades since the end of the license raj in the 1990s, the Indian economy has gradually opened up along with the governments relaxation on its pissedly controlled policies. On the contrary, corruption in turn has become standard in most business processes.One would find the formal route of setting up a business extremely difficult in India and it is only through bribery that mingled processes can move or speed up. 2. 4Import Tariffs Despite steadily opening up its economy, India has however maintained high import tariffs, specially when compared with other countries. Before the 1990s, average tariffs exceeded 200% and decimal restrictions on imports were extensive. Post 1990, India has been taking steps to cautiously reform t ariffs and concentrate on only on goods and services of highest necessity.This has resulted in Indias trade to GDP ratio increasing from 15% to 35% between 1990 and 2005 according to World Bank. Non-agricultural tariffs invite fallen below 15% and quantitative restrictions on imports have been eliminated. However, that does not mean India is a completely free market as the government has maintained a degree of economic protectionism. For instance, agricultural tariffs remain between 30-40% and anti-dumping measures have been used to protect trade.There have also been numerous requests by the US to the Indian Ministry of Commerce to reduce tariffs on industrial goods, especially in key segments like commercial air lines. On the other hand, India has recently been pushing for a more tumefy-favored inter matter trade regime, especially in services where it is strongest in. So India mustiness find some way to reconcile the 2 issues here. 2. 5Engineering skills In 2008 approximatel y 350. 000 students graduated from college holding an engineering degree, 23,000 with a Masters degree in engineering and only 1,000 students were awarded with a PhD degree.These figures were estimates by Rangan Banerjee and Vinayak Purushottam Muley, some(prenominal) employed by the IIT in Bombay. The number of engineering graduates has been growing significantly over the last years and is now larger than in America. However quantity does not mean quality. According to a survey of local companies, only 4% of Indians engineers are immediately fit to work for software strategy firms and only 18% are employable in the IT sector (McKinseys survey of international firms 25% of graduates pass IT application-specific fatalitys).Hiring companies bring to put a lot of emphasis on training on the job in order to bring Indian engineers up to mark. 2. 6Entrepreneurship Author Raghav Bahl argues in his playscript Super Power? that the Indian entrepreneurship trumps the Chinese due to mo re cloistered ownership, intense competition and high merchandiseivity in India. In his throw he describes an interview with George Soros in December 2006, asking him about Indias competitive advantage over China. Entrepreneurship was the answer.According to Soros, India had already brought up companies with frontmost reputation (Tata, Infosys) which is something China lacks. According to the author entrepreneurship is embedded in Indian genes and he points to the communication industriousness which was liberalized approximately 15 years ago. Since then the number of TV channels and saucyspapers have exploded and the telecom industry has now 500 million customers and is adding 15 million per month under extreme competitive conditions. The tough competitive environment fills for high productivity.Since the private sector in India is footed on common law, entrepreneurs can act in a legal thus predictable framework without fearing expropriation. The result is that Indians priva te sector is booming and is only set about hindrances of the states bureaucracy and poor infrastructure. China, with its massive population, does have its fair share of entrepreneurs of chassis, but the business environment in China is even more challenging as compared to India. In China, the state and the numerous state-owned enterprises with their easy credit access, are the biggest enemies to the private sector.According to Marshall Meyer (Wharton Business School) the government will always remain in control of the 100 largest firms in China. The tight control limits competition and the drive towards higher productivity. 2. 7Trade imbalance and inflation Trade imbalance has always been a sore point for India where it has always suffered a trade deficit. Part of this can be explained by the effectuality of the domestic market and hence the reliance of the GDP growth on it. This trade deficit has however increased significantly over the years and soon stands at some USD $16 bil lion as of August 2011. unneurotic with this, annual Inflation has also increased significantly and is currently standing at close to 10% in 2011, way above the generally acceptable levels of 6%. This rise in inflation is despite the India rudimentary banks efforts to contain this through multiple interest rate hikes. However, Indias inflation is caused more by structural factors in the economy, including some discussed above like poor infrastructure, lack of skilled workers and low productivity in agriculture which will require study policy reforms to tackle, sort of than simply increasing interest rate.All these factors combined can pose a significant challenge for India moving forward. Inflation does not just affect the equal of goods for the domestic market and hence affordability. It also affects the strength of the Rupee, Indias national currency. The strength of the rupee has been steadily decreasing over the years compared against the dollar and this in the long term w ould affect Indias competitiveness. Granted, India is still very much a consumption led market.When compared with many Asian acclivitous economies, this advantage has narrowed down over the years, especially given the fact that India now imports close two thirds of its oil requirements from afield markets. Additionally, while the overseas debt has gone up to $306 billion at the end of March 2011 from $221 billion at the end of March 2008, the cushion of foreign exchange reserves was stable and decreased slightly to $305 billion from $310 billion over the akin period, which is a worrying reduce.The main reason wherefore internal public debt has increased in India during in the last decades was the requirement of funds to finance various developmental programmes as twain tax and non-tax taxs were totally inadequate to finance the government expenditure. The external public debt in India Increased significantly during 1961-2004 as it was utilized to make import payments and so lve balance of payment problems. The tremendous rise in total public debt in India during 1991-2004 provides an alarming signal to Indian economy. 2. 8Indian Political scene Indias political scene has always been an interesting one.It is the worlds largest state where literally everyone has a voice and this has on more than one occasion, resulted in slow and costly decision making. While there is a central government in place comprising of the standard hierarchy of politicians and parliament, the states themselves also have their own legislative environment, which differ greatly from one another due to the significant autonomy that they continue to enjoy. In terms of political parties, there are 2 main coalitions The Indian National Congress (current public opinion party) and the Bharatiya Janata Party (BJP).As such, it is unfortunate to note that while Indian National Congress has a majority in the current ruling government and even control some state assemblies, it has failed si nce to implement any significant reform programs. This is in part due to the complex nature of the Indian political scene, but more important than that is the amount of time and energy spent to manage some(prenominal) high profile corruption cases, the most significant of which (as discussed above) was for the 2010 Commonwealth games and the auctioning of the 2G wireless spectrum.As such, while India has built up a profile of being a hot bed for FDI, this evaporable political scene has also detracted some countries like the UAE from investing as comfortably. 2. 9People As a last part of Indias growth story, we also thought it be interesting to explore if the lives have improved over the years as sanitary. After all, a key part of growth is to ensure the peoples standard of living goes up. There are bright spots of course. Gross income per capita has experienced astonishing growth, r individuallying USD $,219 in 2010, up from close to USD $400 back in 2000, in line with the growt h of India to some extent.This represents almost 14% growth on average over the last 10 years. However, such massive growth is not without its problems. The middle class has exploded deep down India, reaching 32% of the overall population in 2010, and while the service segment has boomed, it only accounts for 20% of total employment in India. Majority of the people are still farmers by trade, working within the agriculture segment that is protected within India but now only accounts for 15% of its overall GDP.In addition, according to the registrar of India, the number of young adults aged between 15 and 50 years will reach 800 million by 2016. This means that the number of people entering the workforce will shoot up dramatically over the next few years. The question then is where are the parvenu jobs going to come from? It is not a realistic expectation for the service segment to dramatically increase employment by another 20 points and the manufacturing segment isnt growing fast enough to contain this population, which in China has taken on the main bulk of the employment. . THE PATH frontwards As per the introduction, this paper will attempt to argue that India should look to develop another industry the Design industry. Why such a specialise segment? What is critical for both India and its MNCs is the ability to build a world-wide brand. There are 2 typical routes taken by companies to cause themselves are as shown below Route A is the more fusty approach where a political party looks to develop a consistent revenue stream before embarking on its own brand.Route B, while more risky, brings much windy rewards should one be successful as seen from the likes of HTC and Giordano. The lolly reaped however are quite significantly different. Just simply adequate an ODM, yields a 6% increase in terms of margin when compared to just being a simple OEM, primarily because of the additional value one can bring. Requires market and technology competencies Be coming a instauration hub would also enable India to grow its manufacturing segment at a much hot mistreat.India has the potential to become a complete solution provider it is already strong in consultancy and services not to mention a big pool of engineers and scientists, and it has a lot of land available to set up manufacturing plants. Plus it has a large and still relatively low cost labour market. Hence, domestic players who are strong in the services piece can build up its manufacturing capabilities quite easily to up the ante. International firms who already have plants in India, can tap onto the big brain pool and potentially bring lots more R&D investment into India.So in terms of help India grow both from a brand and FDI perspective, we felt that becoming a approach pattern hub is key. Additionally, end is really the driver of profits as it is the key differentiator for a lot of products, which in turn lead to higher price points and consumer willingness to pay. orc hard apple tree and its iPhone is the perfect example of this. The great part about all this is that construct innovation can cross all industries from automotive to design to FMCGs etc, which also means it is not a niche segment that will poop out out after a period of time.The question is what should India do to develop this segment quickly and effectively, and the rest of the paper will be addicted to that using agency as a case for analysis. 4. INDIAS FASHION INDUSTRY TRULY GLOBALISED? 4. 1The Fashion Industry The worlds thrill industry was born together with modernisation, even though style has been in existence for more than five thousand years. And with industrialisation, continuous technological advancements and global capitalisation from the 20th century onwards, the port industry has contributed to a significant share of the worlds output.A study on emerging port markets showed that India, amongst countries like South Africa, the UAE, Singapore, Russia and Brazil had emerged as a new and unique player in this global industry since year 2000. In many of these countries, one of the key growth drivers identified was actually government deport. Others mentioned are factors such increased sentiency of international brands and higher demand for agency as countries globalised (Grial Research Sep 2009).For India, the government had not vie any key role in its emergence in the shape industry. We would want to explore what the key drivers are, and how they can be used to spot Indian fashion on the global success map. In Asia, China is the biggest wearing apparel and fashion market with domestic clothing sales value US$33. 1 billion in year 2008 (Price Waterhouse Coopers report). As the Chinese are relatively more brand conscious than most Asians, the high-end fashion market is actually dominated by key brand label of US, Europe, Japan and Korea in China.As for India, it is the third largest in apparel market after China and Japan ($31. 8 bil lion Willy Barker. com) with US$5. 8 billion (PWC report). Refer to Chart A. With experts looking to the fashion industry in Asia for good growth potential, China and India are expected to have double-digit growth in sales in the next two years. 4. 2The Indian Fashion Industry In a McKinsey report on Indias invasive apparel market, Indias apparel sales was expected to reach an estimated US$25 billion by end of year 2010 (McKinsey Jun 2010).In fact, apparel is the second largest retail category (behind food and groceries), and this growth of double digits showed that the great potential of this industry will continue to see strong and dictatorial expansionistic opportunities. With that we do expect to see faster growth in the Indian fashion industry. How true is that? In order to know whether it can be true, we will need to go through the underlying factors, key drivers and perhaps the ways of overcoming constraints of this industry.In addition, it is important to look from insid e out as well as outside in and explore whether Indian fashion can be truly globalised and whether foreign industry players stand a scene in penetrating the Indian market. All in all, with potential growth in Indian fashion design, it will push its manufacturing requirements, and truly globalise Indian fashion as well as setting pace and example in an important industry for India to carry through from design innovation throughout all industries, just like fashion design is trying to do. . 2. 1Factors driving growth Indeed there are some(prenominal) key drivers which drove, and most of these will probably continue to drive the local domestic fashion industry to greater heights. These can be sorted into 3 key areas mainly the increasing disposable income of Indians with economic growth driving GDP per capita from US$329 in 1991 (Wiki) to an expected US$2,110 by year 2016 (refer to Chart B) 1991 2016 2010 Indian youths behaviours and expectations of fashion as well as Indian-Western concretion and influence.These are definitely inter cerebrate and create a powerful driving force which will continue to compel the Indian fashion industry, as well as how Indian fashion can be truly globalized. Figure A on the main growth drivers for Indian fashion industry Real average mansion disposable income in India has more than doubled since 20 years ago by about US$2,000 per household (Earthpulse). In addition, the middle class portion is expected to continue a significant growth rate and this will create a robust consumer market internally in India.With stronger purchasing power, fashion products will definitely see faster growth as such goods have been proven to be demanded as people become richer. Latest figures (refer to Chart C) show that comparing year 2007 through to year 2010, Indias gross and disposable income has grown by almost 50%, and with this comes prospering urban consumer lifestyle which push for stronger demand for fashion, given more social opportuni ties as Indians evolved to have richer tastes and improved social and work lives.At 29% of population residing in cities, India has one of the lowest urbanisation rates in the world (McKinsey report), and this shows the potential upward growth as Indians continue to stream into the urbanised cities to work and live, and with that will continue to demand strongly for new styles and fashions in order to stay relevant to the rest of the more developed societies, which is part and parcel of urbanization and changing cultures in growing ad developing countries.Also, with higher disposable income, it pushes more businesses, both foreign and local enterprises to expand in hope of being commencement ceremony movers in many areas and aspects of fashion such that they will be the like brands or choices as Indians grow richer by the day. As such, larger shop malls are opening and many are focal pointsing on apparels and other fashionable items. In addition, with the increase in the usage of credit separate with more Indians holding jobs in bigger companies, there is no motion that this factor will continue to drive consumer demand, and definitely the fashion industry growth.The second driver is really the change in the demographics of the Indian population. With bump education, younger age classifys, more scene to foreign ideas and stuff through growing internet users and all, the youthful Indian population (in comparison with aging societies of Japan and China) have refreshed the fashion and apparels market with fresh and new ideas, and as a result, even traditional costumes such as saris are modernised and being worn differently, and India has also seen many renowned designers on the international scene.Coupled with things like the launch of new programs and courses in various Indian schools, such as Indian School of Business launched Business of Fashion Strategic Brand Management, there is much greater promotion of fashion and push of local designers and the i ndustry to an international level. emerging affluence of the younger generation has also increased the brand awareness of Indian consumers, thus helping India moving closer to the Chinese standards of brand consciousness, giving rise to the vibrancy of the fashion industry.Hence, as Indias economy continues to grow stronger, and with the help of a sustainable youthful population, the Indian fashion industry can be boosted with much more international exposure and clientele, thus truly globalizing this industry to attract and promote Indian fashion products and output internationally to a greater level of competitiveness. Another important driver is really the fusion of Indian and Western tastes and perhaps some parts of culture, which has gradually influence the lives and lifestyles of Indian nationals.This can be attributed to some(prenominal) reasons such as the ever growing number of foreign international companies setting up branches and even regional headquarters in India th e flood of foreign television programs, all thanks to cable TV, as well as movies and the Internet which play a big role in educating and updating Indians of the latest global fashions and trends many more Indians receiving education overseas as compared to previous 20 years. As a result, this mixing of the East and West has also provided a unique Indian fashion line and trend which has given foreign fashion lines a run for their money.Also, Indians themselves for opting for more Western, especially American and European styles of fashion as compared to traditional clothing, although it will still take many decades and generations to dilute the traditional Indian clothing. This fusion is essential for Indians to embrace the fast pace changes that we are seeing in the fashion industry globally, and enable them to quickly adapt and even be able to set trends for the future. 4. 2. 2Local and foreign players Being one of the oldest civilisations in the world, Indian fashion has combine d tradition, culture and modernisation to become an emerging market since year 2000.Fusions of Indian and Western styles have dominated the catwalks of Indias various fashion weeks, which have become popular and saw strong demands topically and overseas. Since year 2000, India has organised an increasing number of fashion weeks, such as Delhi fashion week and Lakme India Fashion Week, which are annual events showcasing the works of the nations best fashion designers. This has attracted local and foreign purchasers, facilitating business opportunities as well as giving local talents the platform to globalise their designs.Lakme thirteenth India Fashion week which attracted many buyers both locally and abroad With experience and the foresight of continuous strong growth, in year 2008, a group of lay outed Indian designers founded the Fashion Foundation of India (FFI) and it aims to help all local designers and the fashion industry grow internationally. At a particular Delhis fashion week, about 70 out of 150 buyers came from abroad, and this numbers continues to grow as more overseas buyers recognized the popularity of Indian fashion.With the local scene doing well with their local product designs, given that more and more Indian grown companies are also moving into the fashion and apparels markets, such as ITC (Imperial Tobacco Company of India Ltd) creating Wills Lifestyle with 61 stores in 34 states, Trent, belief Retail, Indiabulls, etc. , the fashion and apparel sector are bound to see double digit growth for the next 5 to 10 years, and this is a boom for the apparel manufacturing industry indeed. In addition, India is attracting foreign investment in fashion as well.We see the country being a focus for Inditex, the Spanish clothing retailer which opened 25 Zara shops in year 2010 in partnership with the Tata group. Another international renowned fashion company who had made their debut in India since a few years ago opened its third store in Mumbai sell ing international as well as local designs which includes exclusive sari designs which sold for between USD $6,000 to $8,000 each piece, targeting at the expanding luxury market in India.Although Hermes (French) did not violate whether their sari designers are locals, but from the design, it appeared obvious that Indian designers would definitely had played a key role. Hermes is definitely not the only company that had launched Indian collections. Other luxury brands like Tods (Italian) and Prada have gone into the market with the Indian touch of silk satin clutches, woven sandals and embroidered cotton dresses which are typically made in IndiaFrom the above, we can see that there is very strong foreign interest in Indian design and thereafter manufacturing in fashion products locally as most foreign players see the great potential of Indian consumer market given its strong growth in GDP per capita and other factors as already discussed earlier. The challenge for these global brand s will be how they can translate the interest and investments into successes. One area is of course trade barriers which should see changes if the Indian government wish to liberalize this sector unless. 4. 2. Fashion design industry an example of Indias design future Confidence is for sure to be going the positive way as even the worlds leading fashion and style consultancy firm, WGSN, had set foot in India with the intention to partner with the Indian fashion industry to identify the opportunities and the process to become a global player. WGSN had planned to focus on the whole fleet which included fashion designers, manufacturers and retailers by helping them move up the value mountain range to tap on more and bigger opportunities both in the local scene as well as in the global fashion design industry.As quoted in an Economist article on Indian fashion design future, it tell that It is Indias potential as a source of future design stars that attracts the foreigners. umpteen foreign players are really looking for that polished diamond, i. e. designs or designers, which are able to combine Western cuts with Indias talent for fancywork and its famously fine textiles. However, many Indian designers also lack the organisational skills and infrastructure needed to handle large orders. But as Indian designers attract investors, their business skills will no doubt improve.And as discussed in the macro analysis earlier, there are many constraints atypical in obstructive exponential growth which basically applies in impending the faster growth in the Indian fashion industry as well. These are constraints such as poor infrastructure, inflexible labour laws, even the difficulty of growing from small to big because of conservative banking systems, etc. We can see that more has to be done for the fashion design industry, which will be further elaborated in the next section of this paper.Depending on current fashion institutes, and push from Indian domestic design ers such as Rina Dhaka, Anamika Khanna and Manish Arora who have gained some success in the international scene and are trying to push more for this industry through creation of associations like FFI (Fashion Foundation of India), this will still not be sufficient in growing faster unless the government re-look at their own strategies and is able to see the importance of the fashion design industry in driving both the fashion industrial and service sectors, as well as to put a propose for India in international fashion arena.With this, we draw parallel to other Indian industries (IT, Healthcare, Higher-end consumables) which too can ride on design to bring about a positive and effective change in the value chain of India, and as such may bring India to the next level in climbing up the ladder of being the worlds main heavy weight in economic power in competition with China. An example which can show how many are envisioning this trend and are trying to ride on the bandwagon to per haps have send-off movers advantage is the fact that IDEO, the worlds top design and innovation consultancy firm, has landed in India.It is pretty obvious that IDEO has treasure the potential of India and Indians being groomed to put design and innovation in their move to grow the economy exponentially All of IDEOs work is done in conveyation of the capabilities of our clients and the needs of their customers. As we iterate toward a final solution, we assess and reassess our designs. Our goal is to deliver appropriate, actionable, and tangible strategies. The result new, innovative avenues for growth that are grounded in business viability and market desirability. remove IDEOs websiteAnd it is truly what the Indian government can concentrate on, and that is to use design and innovation as key drivers in improving the action of both the local industrial and service sectors, which will in turn improve the Indian economy tremendously and the lives of Indians with more jobs and eco nomic stability, moving from Third World to First World country for all Indian humanity. 5. COMPARISON WITH CHINA The ancient Chinese strategist and philosopher, Sun Tze has once said if you know the enemy and know yourself, you need to fear the result of a hundred battles.This also applied for India in order to look its strategy in developing the design industry. In the previous section, we have done the detailed analysis about Indian economic and the direction for its economic development direction, in this section we will discuss how should India compete in the global market. Firstly of all, we shall identify Indias main contender in the individual industry. For the manufacturing industry, base on the market size, Indias main competitors are mainly China, Japan and Korea, which are mainly within the same geographical area.For the service industry, Indias main competitors are mainly USA, China. For the design industry, Indias main competitors are Italy, USA, China. As we can tel l that, in each of the industry, China is the overall main competitor for India. Since China and India both are leaders in the emerging market countries, both are having similar competitive advantages (massive labor resource, cheap but high skill workers, high GDP growth etc), there are more and more competitions between the two. A further analysis shows that China has already made a leap in the development of its design industry.Referring to the Forbes global 2000 companies list, we can tell that there are few Indian companies in the product renovation relevant industry, the majority of the listed Indian companies are in the Banking industry, nerve Manufacturing Industry and Natural resource related Industry however, there are many Chinese companies in the list are famous for their product innovation design, for example, Lenovo Group is the global leader in PC design manufacturing industry, ZTE is famous for its network equipment design innovation and TCL is famous for the elec tronic public convenience innovation and design.In order for India to compete in the manufacturing with the leap of design industry, we think that it is reasonable for India to study how China developed its design industry, and base on the comparison, Indian may take some lesson watch over from China. Chinese government recognizes the importance of design innovation in 1980s. Since then, the government has taking stepping in helping to develop its design industry. Basically, China takes 3 steps to develop its design industry. The first gear step is to establish the education system for the industry.In 1984, China setup the first design course in Hunan University, Since then, there are more any and more students graduated with major in industry design or fashion design. Till now there are nearly 10. 000 students graduated with major in industrial design from 400 colleges every year. This large talent pool provides an deepen support for China to develop its design industry. This is also one of the major factor that many multinational design related companies are setting up its design innovation centralize or RD centre in China. The second step is to establish the design industry network across the country.China has established 34 design associations all over. There are more than 30 design festivals and nearly 50 seminars in China every year, many of these events are sponsored by the Chinese government. The government also elevate and promoting the design innovation by pose country wide awards to motivate designers. For example, since 2005, the government established the honoured activities selecting China outgo Ten Outstanding Young Designers every year. Also, since 2006, the government establish the national industrial design award Red Star annually. The third step is to support the Local companies and projects.The government has made plans to introduce national support to develop the fashion design industry by providing funding for design projects. There are also government policies to encourage design related firms to develop. Overall, China has achieved progressive result in developing its design industry. In 2009, Chinese government produced an advertisement of a international image promoting Made in China brand and aired on CNN Asia. This ad is by choice made to rebuild and strengthen the Made in China reputation. However, it also shows that China has taking he product branding into a national level, the government may be is aiming for promote Design in China in the near future. 6. PATH TO VICTORY? India may take reference in Chinese government leading example in development its design industry. Base on the previous discuss, we think India should recognize the need for the country to development its design industry, at the mean time learn from its competitors and apply the strategies according to its own market needs. Referring to Chinas strategies, there are four recommendations we think Indian may demand The first reco mmendation is that Indian should support the design education.Although there are two global top design schools in India, however, there are not many schools offering design as a specialization. Even within the two top schools, there are reports shows that the facilities for design faculty are very limited and students do not have exposal to the international design industry. We think that Indian should recognize that in order to develop the industry, there must be enough talents available. Indian government may administer the following strategies to support the design education. 1. The government can identify several schools in each state to introduce to design course.The government should consider provide funds for the school to recruits staff either from the industry or from overseas. 2. The government should encourage the internal national design company to open branch office in India. This local operation of the overseas design company will generate the market demand for the de sign talents and attract more youngster to take the design related courses. 3. The government should establish international activities to provide international exposal to Indian schools and the students. The second recommendation is that India should consider establishing its design network across the country.India is also a big country it should also consider establishing the design association in each state. We understand that for India, the local state government may have more resource and authority in local development we recommend the central government to provide the policy to guide the local state government to encourage a close connection between design associations in each state. The third recommendation is that India should consider establishing a regional design centre. In this way, India may take the opportunity to link the work design industry with the design centre and spread to each state across the country.One city India can consider to label as the design centre is Bombay, since Bombay is named as the commercial entertainment capital. The fourth recommendation is that the India government should consider encouraging the local companies to develop its design and innovation strength. The government may provide the funding support for design projects. This will help the Indian companies to development a sustainable model. Price + Value In order for a business to sustain, there are basically four key factors investment, productivity, human development and product quality.The education support in recommendation 1 will help to provide a sufficient high skill work force for the company to develop its design arm. The sign government funding will provide the investment for the company to develop the product design and innovation. The introduction of the new drive force for the product design innovation will contribute to the increased value in the product quality and increase the productivity. The business sustainability will also help to sustain t he design industry to develop. APPENDIX for references 1) http//zeenews. india. com/news/nation/india-s-suffocating-bureaucracy-worst-in-asia-survey_536445. tml 2) http//www. li. com/attachments/EntrepreneursIndia2011. pdf 3) http//online. wsj. com/article/SB10001424052970204479504576639233537716542. hypertext mark-up languageproject%3DISTARTUP1011%26articleTabs%3Darticle 4) http//business-standard. com/india/news/us-wants-india-to-decrease-tariffsindustrial-goods/374667/ 5) http//web. worldbank. org/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIA 6) http//www. forbes. com/2010/10/13/india-china-entrepreneur-markets-economy-raghav-bahl-book-excerpt. html 7) http//www. li. com/attachments/EntrepreneursIndia2011. pdf 8) http//en. wikipedia. org/ ) Grail research on Global Fashion Industry evolution in Emerging Markets (Sep 2009) 10) http//www. merinews. com/ Article on Indian fashion industry becomes global (2nd Mar 2008) 11) McKinsey Company reports a. Indias fast-growing apparel market (Ju n 2010) b. Made in India The next big manufacturing export story 12) http//blogs. wsj. com/indiarealtime/2011/10/12/hermes-goes-local-with-india-sari-launch/ 13) Forbes Fast Fashion Zara in India (29th Jul 2010) 14) Price Waterhouse Coopers Strong and rigid 2011 Outlook for the Retail and Consumer Products Sector in Asia 15) http//willslifestyle. om/Season21/lounge. html 16) http//www. earthpulse. com/ PARKING quid Easy access to credits for the private sector i did not write anything about it 1 . http//www. forbes. com/global2000/ 2 . http//www. chinahush. com/2009/12/02/made-in-china-ad-campaign-and-its-secrets/ 3 . http//nitawriter. wordpress. com/2007/12/11/india-has-two-of-the-best-design-schools-in-the-world/