Severe competition on global level and lack of initiatives and direction on the domestic front have made a dent in India´s textile exports with a dip in figures for FY 2014-15, diminishing the scope of achieving the cherished goals. S Joseph & M Karthik take an overall look at the scene.
Textile exports, which have been touted as one of the major drivers of India?s economic growth by the present Government, seem to have hit a snag, casting shadows over targets, dashing hopes. The Government set a target of $47.5 billion for textile and clothing exports for the current fiscal year, aiming for an almost 14 per cent rise in outbound shipments from the actual level of 2014-15. But the country?s overall textile and garment exports grew roughly 5 per cent to $41.4 billion against the official target of $45 billion for 2014-15, according to a Textile Ministry official.
If this is a pointer to the future, what lies ahead is anybody?s guess? The report of the Working Group constituted by the Planning Commission on India?s exports during 12th Five Year Plan (2012-17), envisages India?s exports of textiles and clothing at $64.41 billion by the end of March 2017. Judged by the present situation, this is going to be an uphill task!
Exports of fibres crashed over 36 per cent up to February last fiscal, while some other textile items witnessed just a 0.4 per cent rise, primarily due to a slowdown in top buyer China, according to industry executives. The communist neighbour usually accounts for over 70 per cent of India?s cotton and 40 per cent of yarn supplies. Consequently, exports of raw cotton, including waste, dropped almost 47 per cent during the April-February period from a year before.
With demand from China remaining dull and the Government withdrawing certain export incentives to the sector, the shipment target for the current fiscal would be hard to achieve, especially in view of stiff competition from countries like Vietnam, Bangladesh and Pakistan.
The competition is springing up from places that we never heard of a decade ago. ?Several new countries have emerged as the leading textile and apparel producers. In 2000, Vietnam had a share of only 0.1 per cent in the US imports, which increased to 8 per cent in 2013, making it the second largest supplier country in the US market behind China [Data Source: US Department of Commerce, Office of Textiles and Apparel]. Similarly, in EU-28 market, Bangladesh increased its trade share from 4 per cent in 2000 to 11 per cent in 2013 making it the third largest supplier country in EU-28 market behind China and Turkey,? says Prashant Agarwal, Joint Managing Director of Wazir Advisors Pvt Ltd.
The opinion of Siddhartha Rajagopal, Executive Director, The Cotton Textiles Export Promotion Council [TEXPROCIL], is in line with that of Prashant Agarwal. He says: ?The current market situation is quite grim as the textile & apparel sector has been unable to gain traction in its export growth during the first quarter of this fiscal year. Part of the reason is the slowdown in the emerging markets like China, Turkey, Brazil, and Russia. Apart from this, the developed countries like the member states of the European Union, Canada and Japan are not showing the expected resurgence & recovery. Some growth is seen only in the US market.?
Rahul Mehta, President of Clothing Manufacturers Association of India (CMAI) exudes optimism. Says Mehta: ?The target for garment exports is around $18 billion by the end of this year. And I think [realistically] this figure is quite achievable. There is immense potential that needs to be tapped.? However to explore this opportunity, he avered, ?Where India is lacking is the consulted effort by the government and the industry. The concerned autho