Reform – Not Making It In India

Not Making It In India by Siddharth Bhargava, Matthews Asia

In catching up with an old friend who was recently visiting from India, the subject came up of a new development with his family business. Since 1987, his family’s private company has produced accessories and apparel in India, where the textile industry is the second-largest employer nationwide, after agriculture. But his firm is now going through an interesting transition—it is being moved completely out of India. In the early 2000s, on the back of rising exports stemming from a weak rupee, the textile sector saw heavy investment. But between 2005 and 2008, the rupee appreciated and exports slowed, leading to overcapacity and reduced profitability. Against this backdrop, my...