Textile sector unlikely to post 10% growth

New Delhi, May 15

THE domestic textile and apparel sector is unlikely to record 10 per cent growth this year, even as apparel exports of Bangladesh is expected to cross over six billion US dollars, according to a CII study.

"Indian textiles and apparel sector may not even show a 10 per cent growth this year. But a country like Bangladesh is showing great promise in terms of apparel exports. Total apparel exports from Bangladesh is expected to be over six billion dollars," a CII study on Indian textile industry said.

The study said that high cost of production was making it difficult for Indian companies to compete in the international market. "The Indian industry is losing out because of four main reasons. The first is that there is a totally unbalanced development of textile value chain from fibre to apparel," the study said adding that a myopic and lack of holistic view on the relevance of the various sub-sectors was another reason for the lower growth.

The study also said that the increasing sectoral divide in the industry, the impact of the WTO and increasing regional trade blocs were also affecting the industry. It said that the recent deals signed by the European Commission with Sri Lanka, Ukraine, Bosnia and Herzegovina to lift textile quotas and import restrictions would ensure higher exports from these countries into Europe. The study warned that while countries like Sri Lanka were getting ready for a quota free and lower tariff regime, India was still preparing for 2004. As part of the deal, Sri Lanka has notified the WTO bound rates of duty for the entire textiles and clothing sector, the study said adding that it had also reduced tariff levels. "These reductions cover a number of products and in particular carpets. Where Sri Lanka applies lower rates than those notified, the applied rates will not go up. Sri Lanka has moreover agreed to refrain from introducing any non-tariff barriers to import of textiles and clothing," the study said.

"India has to learn from this example," the study said and warned that even as countries like Sri Lanka and Bangladesh were now beating India in the textile export game, China was another competitor which had the potential to deliver a fatal blow.
India has set an export target of around 17 billion US dollars worth apparels and ready-made garments for 2001-02 and 50 billion dollars by 2010. (PTI)