Indiaâ€™s overall textile and garment exports that also include those of jute, coir, handicrafts and handloom items to not only miss the initial official growth target of 15% for 2014-15 but fall short of the 5% expansion rate expected until recently. The government had initially set the export target at $45 billion for 2014-15, compared with the actual exports of $39.3 billion in the previous fiscal.
According to the latest official data, the overall textile and garment exports has grown by just 1.7% touching $35.29 billion during the April-February period, compared with 34.72 billion a year before, while imports have risen by 14.2% during the period,
Exports of fibres crashed over 36% up to February last fiscal, while some other textile items witnessed just a 0.4% rise, primarily to a slowdown in top buyer China, according to industry executives. The communist neighbour usually accounts for over 70% of Indiaâ€™s cotton and 40% of yarn supplies. Consequently, exports of raw cotton, including waste, dropped almost 47% during the April-February period from a year before (See table). The only major growth driver has been the garment segment, with a 13.4% rise between April and February from a year earlier.
Countries such as Bangladesh, Vietnam and Cambodia import textile items in large volumes for converting them into finished products such as garments for subsequent exports. Indian textile industry can capture these markets more effectively for which the industry needs some help for government in form of some incentives to export products, said DK Nair, the secretary-general of the Confederation of the Indian Textile Industry.
He added that currently domestic textile exporters are given a 2% export incentive for outbound shipments only to the US, the EU, Canada and Japan â€” the markets where the appetite is far more for garments than for textiles.
Imports of textiles, however, went up to $5.57 billion between April and February, compared with $4.87 billion a year before. However, Nair said that as most of the items imported are used as inputs for finished goods, the situation isnâ€™t alarming yet.
However, despite the recognition of the textile sectorâ€™s role in the Make in India concept as well as in jobs creation, with the Ajay Shankar-led panel envisaging annual outbound shipments worth $300 billion by 2024-25, a lack of adequate focus and proper planning in boosting exports have also taken a toll, textile industry executives had said earlier. The government is yet to come up with the textile vision document, which was to be based on the recommendations of the Ajay Shankar panel, even ten months after the report was first submitted with the textile ministry.
Subdued textile export demand has reflected in the industrial production data as well. According to the index of industrial production data, the textile segment grew just 2.4% from the April-February period from a year before.
The countryâ€™s textile and apparel exports have expanded at an average of 11% over 10 years through 2013-14, still lagging the growth rates achieved by some much smaller nations. Even Vietnam could achieve a peak export growth rate of 30% while Bangladesh could achieve a growth rate of 18% during this period.
Higher textile exports augur well for the economy as they accounted for 12.6% of the overall exports last fiscal and the sector employs 35 million people, having become the largest employer after agriculture.
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