Labour Cost (US $/hour) in Readymade Garment Industry across the Globe

This is a guest contribution from Chandan Saha. 

The ready-made garment industry is highly labour intensive. Hence labour cost per hour is an important factor in this sector to remain competitive. As per the global Statistics & data available, it reveals that labour cost per hour in India is substantially lower than the developed and developing countries in the world.

image courtesy: Denim experts limited

However, there are few under developing/developing countries in Asia, where labour cost is lower than in India. Countries like Vietnam & Cambodia with lower labour cost are slowly making an inroad in the global market and the progress is very fast. It is a fact that labour cost per hour simply does not indicate the impact on garment manufacturing cost. It also depends on the value addition made by the individual per hour. It is reported that though labour cost is high in some countries but value addition made by labour, is substantially higher compared to other countries including India.

Unfortunately, this did not happen in our country in the absence of appropriate plan & initiative, though, the Indian workforce has a good skill & knowledge. As per my knowledge, there are a few industries in NCR & Mumbai, who have framed strategic plan to motivate and encourage the workforce to enhance value addition in productivity. Hence; India should make appropriate initiatives to make this advantageous position in favour, to accrue the more benefit by maintaining the higher ratio between labour cost per hour and value addition made by the individual per hour. 

The labour cost per hour of different countries is given in the table below

Table: Garments manufacturing labour costs (US$/hour) by Countries

Asian Competitors		US Regional Suppliers
		Mexico	2.54
Bangladesh	0.22	Honduras	1.72-1.82
Cambodia	0.33	Dominican Republic	1.55-1.95
Pakistan	0.37	Nicaragua	0.97-1.03
Viet Nam	0.38	Haiti	0.49-0.55
Sri Lanka	0.43	EU Regional Suppliers
Indonesia	0.44	Turkey	2.44
India	0.51	Morocco	2.24
China(remote/inland areas)	0.55-0.80	Russia	1.97
China (other coastal/core areas)	0.86-0.94	Tunisia	1.68
China (Prime coastal areas)	1.08	Bulgaria	1.53
Malaysia	1.18	Jorden	1.01
Thailand	1.29-1.36	Egypt	0.83

Data Source: ILO Report, 2011 & NCM-April, 2013

About the Author: Chandan Saha is currently holding the position of Joint Advisor (CI), Planning Commission, New Delhi, India. He is a Fellow of Institution of Engineers India and Life member of various professional associations. He was engaged in R&D works for long. He has received Er. Sadanand Memorial Award from Institution of Engineers India, Orissa Circle for the significant contribution in the development of industry in the state of Orissa.