*By Sreekumar Raghavan* The global economic slowdown and unfavourable exchange rate variations have taken a heavy toll on India's textile exports. This has been the case with other major Asian textile exporters such as Srilanka, Pakistan, China, Thailand, Vietnam while Bangladesh has withstood the crisis and has actually grown during the global economic slowdown.
In 2008/09, Bangladesh clothing exports rose by 15.4% after increasing by 16.2% in the previous year but in the first five months of 2009/10 they fell by 6.7%. However, exports will benefit if proposals to grant duty-free treatment to Bangladeshi clothing in the US market come to fruition according to a report titled "World Textile and Apparel Trade and Production Trends: South Asia and South-East Asia, 2010 Edition" released by Research and Markets. Exports of textiles and clothing (T&C) was US$ 22146 million in 2007-08, but declined to US $ 20939 million in 2008-09. During 2009-10 (upto December, 2009) India exported T&C items worth US $ 15044.89 million as against US $ 15970.50 million in the corresponding period of financial year 2008-09, Panabaaka Lakshmi, Minister of State for Textiles recently informed Lok Sabha. Analysts point out that future export growth of Indian textiles industry would hinge on government measures to boost investment in modernisation and innovation. Dayanidhi Maran, Union Minister for Textiles asserts that government is making every effort to increase India's presence in global market. Among the measures suggested include exploiting potential markets where the present market share can be further enehance. The LAC countries viz. Brazil and Argentina have been identified among such focused countries because of their immense potential. Maran recently said that Indian Textiles sector recorded significant recovery in spite of the global financial crisis, inflationary trends and volatility in commodity prices, which led to build up of strong demand side pressures. The Ministry of Textiles initiated policies for faster and inclusive growth and participatory development. The objective was to maintain the incipient export growth momentum, increasing production and productivity in cotton and cotton yarn, enhancing value addition in garment and apparel sectors, promoting rich heritage of handlooms and handicrafts, institutional strengthening in jute sector, and enhanced acreages under mulberry production and safeguarding employment opportunities. In addition, the Ministry of Textiles tried its best to utilize the better growth prospects of Indian economy for attracting larger capital flows/ foreign direct investment, Dayanidhi Maran said. In the post quota era, India has India’s textiles & clothing (T&C) export registered robust growth of 25% in 2005-06, recording a growth of US$ 3.5 billion in value terms thereby reaching a level of US$ 17.52 billion and the growth continued in 2006-07 as T&C exports were US$19.15 billion recording an increase of 9.28% over previous year. Though India’s T&C exports in 2007-08 at US$ 22.13 billion were badly affected by strong appreciation of the Indian rupee against the US dollar, it still managed to record a healthy growth of 15.59% in US dollar terms (in rupee terms, the growth was about 2.76%), according to India's Ministry of Textiles. The Ministry hopes that Technology Upradation Fund scheme (TUFS) will give the added boost to India's textile modernisation. For the first time, in a major stimulus to the industry, a subsidy of Rs 2,546 crore was released on August 06, 2009, in a single tranche, with the amount credited to the bank accounts of 12.514 beneficiaries in a record time of 72 hours (3 working days) reconstituting an effective addition to the stimulus packages announced by the Government. During 2009-10, Rs. 2,885.98 crore was disbursed as subsidy under TUFS. The government has come up with a National Fibre Policy and its draft has been put up in public domain yesterday for wider consultation .The Ministry has also come up with a one time grant of Rs 200 cr for setting up 20 Effluent Treatment Plant (CETP) by dyeing units in Tirupur to ensure zero liquid discharge. The Ministry had also provided enhanced support handloom marketing, modernisation of 18 mills under National Textile Corporation and providing grants under Scheme for Integrated Textile Parks (SITP) which was released for 17 parks. Despite the global slowdown, share of India’s textile exports in total exports increased to 12.05% from 10.82% in 2008-09. In a ‘Look East Policy’, new markets have been tapped to promote exports, besides consolidating existing markets like EU and US. As part of the initiatives, mega textile shows have been held to capture new markets in Japan, South Asia, Australia, Latin America and South Africa, according to Ministry of Textiles. Some analysts pointed out that both India and China are expected to face tough competition from Bangladesh when it comes to textiles exports. India's new initiatives may not yield results soon and therefore the lull in exports may continue atleast for a year, they added. -- Regards Hardik Shah -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
