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ReturnINDIA: Textile exports showing positive growth
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PublishDate：
2005-08-22 13:22:00
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NEW DELHI: Senior officials of the Ministry told reporters here that against the current fiscal export target of textiles at $15.5 billion, the trends during the first four months (April to July) of 2005 show some steady pickup with export receipts from textiles and clothing hovering close to $5 billion.
They said while the export trends appeared to be showing negative growth from the calendar year soon after the dismantling of quota regime governing global trade in textiles and clothing on December 31, 2004, from the month of April 2005, textile exports have been consistently showing positive growth.
They said in both the US and the EU markets, which together absorb as much as 60 per cent of Indian exports, the volume of exports might have declined but the unit value realisation has vastly improved since April this year, kindling hope for export of more value-added garments and clothing.
They further said that against China's export growth of 60 per cent to these markets in the post-quota regime in the initial few months of 2005, India's textile exports growth was 29 per cent in dollar terms and Bangladesh's 24 per cent.
While the reasons for the relatively slow growth of India's textile exports vis-?vis China are not far to seek, officials said the domestic exporters had seen the rates of Duty Entitlement Passbook Scheme (DEPB) drastically cut during this period leading to narrow or wafer thin margins by way of profit.
With competition from low-cost suppliers such as Bangladesh, Pakistan and Sri Lanka, which enjoy preferential duty benefits to these markets, coupled with the fact that China with its economies of scale in production could withstand decline in prices, Indian textile exporters had to battle hard to make a dent into these competitive markets.
Industry sources said that even against these odds, domestic exporters had to guard against cheap imports of finished goods flooding into the market with the threat of removal of specific duty on textile goods which neighbouring countries like Pakistan have been demanding.
They said that a meeting of the Trade and Economic Relations Committee (TERC) held on August 10 discussed the likely impact of the removal of specific duty on textile products on the domestic manufacturers.
Though no official version of the outcome of the meeting is available till date, the industry is of the firm opinion that at a time when the domestic textile manufacturers have invested heavily in modernisation and upgradation of technology, it would be inexpedient to remove safeguard protection such as specific duty from low-cost suppliers of the neighbourhood region.
The industry is of the view that at least for another two to three years, specific duty protection should be there to indigenous industry as the investments it had made in the interregnum would begin yielding improvement in productivity and help achieve economies of scale for rendering textile and clothing products competitive both in price and in quality.
They said that as the textile and clothing sector is particularly important for small and medium exporters in terms of income, as also in terms of employment, the Government should carefully consider the demand for freeing import regime against low-cost suppliers who are also the country's competitors abroad.
