Global slowdown hits textile industrys growth

Written by Neha Pal | Neha Pal | New Delhi | Updated: Sep 23 2011, 09:48am hrs
All segments of the textile and clothing (T&C) industry from cotton to polyester and jute have registered de-growth since April this year as a consequence of the economic slowdown, the slump in export markets, high input prices and a dampening of consumer demand.

According to a textile ministry official, all products of textiles including apparel have shown a decline in production in the months of April, May and June 2011 in comparison to same months of previous year.

Cotton segment of the T&C industry, which weights 50% in formulating the T&C production index, has nosedived in recent months after a moderation in growth since October 2010 when sudden surge in raw material costs had started crippling the downstream value chain, said Shishir Jaipuria, president, Confederation of Indian Textile Industry.

Wool, silk and jute textiles have shown negative growth during the first quarter of the current fiscal year 2011-12 (-6.7%).

According to experts, there was an increase in foreign consignments and demand for inventories in anticipation for domestic festive season sales last year but such a boom is unlikely this year. Investments from China and other South East Asian countries will pour into Bangladesh, known for low-cost advantage, targeting the Indian market. The recent India-Bangladesh pact that allowed duty-free access of scores of Bangladesh garment items to India would accentuate this trend.

According to CITI, the apex industry body, Bangladeshs apparel manufacturing industry is far more competitive than its Indian counterpart. Indias apparel exports increased by about 5% (compound annual growth rate) from $8.63 billion in 2005-06 to $12.5 billion in 2010-11 against 18% growth recorded by Bangladeshs garment export during the same period. Bangladeshs garment exports increased from $7.9 billion in 2005-06 to $17.92 billion in 2010-11 and would cross $25billion target set by Bangladesh within next 3 years, according to CITI.

DK Nair, secretary general, CTI said, With fears of recession and overall nervousness in overseas markets, support of the government will enable the apparel sector to compete effectively with those countries whose expert policies are tailor made for the apparel industry.