'South Asian countries suffer from high lead time'

Indunil HEWAGE

The South Asian Textiles and Clothing Industry was originated to the global market and exporters should have access to supplies of raw material at world prices, United Nations Conference on Trade and Development (UNCTAD), said in a report.

The report also states that there were various factors associated with competitiveness where regional supply chains could exert beneficial effects. It is evident that transport costs reduce tradeable volumes. In ideal circumstances, supplies procured within the region would involve lower transport costs and thereby improve individual South Asian countries' competitiveness. With regard to exports of textiles and apparel, most South Asian countries suffer from high lead time. Regional sourcing of raw materials, particularly apparel, could greatly help to mitigate this problem. The existing scope for exploiting supply chains largely depends on the progress made on overall co-operative efforts among South Asian nations.

The existence of bi-lateral political differences had affected the progress of the regional economic co-operation.

It has been found that South Asian countries have more restrictive trade regimes with their regional partners than with the rest of the world. Together with tariff barriers, a plethora of non-tariff measures seriously constrain intra- regional trade and investment flows. Due to lack of political will, the region also suffers from relatively poor trade facilitation and high transaction costs associated with cross-boarder exchange.

All this has serious implications for promoting regional supply chains. These countries need to identify potential supply chains that could be formed within the region if the south Asian countries intend to emerge as globally more competitive suppliers of textiles and clothing . However, the region has the supply capacity for exports and in many cases, the region already had lower -cost suppliers.