Textile industry may miss $40.5 billion export target
INDIA: Difficult times in the US and Europe continue to affect the Indian textile industry so much so that the export target of $40.5 billion for the current fiscal seems to be unachievable. In the first half of current fiscal, the industry has not seen much growth, with the garment sector being the worst sufferer.
Cheap garments from Vietnam, Cambodia, China and Bangladesh are flooding the US and European markets as both the countries have become cost- conscious in view of an impending financial crisis. The textiles ministry had revised the export target for textile products to $40.50 billion for 2012-13, an increase of about 22% compared to the $38.18 billion that was set last year. Importers from Europe and the US have not placed much orders for the upcoming Christmas festival this year.
"The impact on Indian garment exports has been largely on account of Europe's inability to buy from India. In fact, the European buyers have not placed much order in the July-August period. The shipments, which generally take place in October-November, are much lower this time. The spring-summer demand from the overseas markets is also low. We do not think that the ministry's target of $18 billion apparel exports will be achieved this year," said Gautam Nair, managing director of Matrix Clothing.
In the period April-July this year, apparel exports have gone down by 14.28% to $4.2 billion as compared to $4.9 billion in the corresponding period of the previous year. "To boost exports in the near term, government should increase duty drawback, give packing credit and other measures," said Prashant Agarwal, joint manager director of Wazir Advisors.
Agarwal feels that, in the long term, the Indian textile industry has to invest more to increase efficiency and productivity to remain competitive. "Chinese garments are becoming costlier and Vietnam has increased wages. Therefore, garments in these countries are becoming costlier.