Exports expected to reach $41 bn in 2014-15; experts put blame on slowdown in China
India’s overall textile and garment exports will likely rise by around 4-5% this fiscal and fall short of the official target of $45 billion, thanks to a massive slowdown in Chinese demand for cotton and yarn, trade and industry sources said on Tuesday.
The overall textile and garment exports, which also include those of jute, coir and handicrafts, are expected to reach $41 billion in 2014-15, compared with $39.3 billion a year before, mainly on higher shipments of garments, said the executives.
However, the official target would be missed, as China, which usually accounts for over 70% of India’s cotton and 40% of yarn supplies, has cut down on its purchases. Consequently, exports of raw cotton, including waste, and cotton yarn in the April-December period dropped 36% and 12%, respectively, from a year before. Exports of textile products rose only 2.2% between April and December from a year earlier.
Despite the recognition of the textile sector’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, they added. Importantly, 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 eight months after the report was first submitted to the textile ministry.
According to the provisional data, textile and garment exports, excluding jute, coir and handicrafts, touched $25.72 billion during the April-December period, up 4.7% from a year before. Handicraft exports had hit $3.9 billion in the last fiscal, recording growth of 18% year-on-year, but industry executives said the growth would be as much as 5-7% in the outward supplies of these items in the current fiscal. The jute and coir exports, although not so significant in the overall basket, are expected to grow in the 10-15% range
“Speculations are rife that the Chinese govenrment has stipulated that on the purchase of every bale of cotton from overseas, a mill there has to buy four bales from domestic sources, which has dragged down imports. It has also been offloading cotton from its reserves. Moreover, the Chinese economy is also going through a slowdown, affecting demand,” said DK Nair, secretary general of the Confederation of Indian Textile Industry.
According to Virender Uppal, chairman of the Apparel Export Promotion Council, garment exports grew 13.4% during the April-February period to $15.26 billion from a year earlier. This means the export growth slowed since Janaury after recording a 16% rise until December this fiscal.
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 2.1% from April to January this year from a year before.