Business Standard: November 19, 2018
Mumbai: Textiles and apparel exports jumped by a staggering 33 per cent in October because of higher overseas demand. Led by the US, the largest importer of India’s clothing, the boom has been triggered by recovery in the global economy. Depreciating rupee helped boost realisations of textile, apparel exporters.
According to data compiled by the Ministry of Commerce, the country's textile and apparel exports stood at Rs 1,986 billion for October 2018 as against Rs 1,489 billion in the corresponding month last year. While overall textiles exports posted a jump of 28 per cent, shipment of apparel from the country shot up by 54 per cent in the month under consideration. Being closely linked with the country's economy and employment generation, the increase in exports indicates recovery in the global economy. The export figures have rebounded after a decline in shipment last year.
“The positive trend in exports for the entire textiles value chain has been the result of Confederation of Indian Textile Industry’s (CITI’s) continuous persuasion with the government, and the pragmatic approach shown by the ministries concerned. Timely policy intervention supported growth in such exports. The textiles industry was under severe stress especially after the implementation of the goods and services tax (GST),” said Sanjay K Jain, Chairman, CITI.
The positive trend implies visible signs of recovery after a difficult period. Industry experts hope that the Centre would continue to take progressive measures to boost exports and limit imports. Continuous growth in exports and index of industrial production index would result in boosting employment, scaling up production and, most importantly, making “Make in India” initiative a reality for the sector.
“September 2017 saw an unusual growth in garment exports with Indian exporters booking orders to take advantage of the old method of duty drawback. During the month, exporters booked orders accepting advance payments as well. So, overall export figure showed a sharp increase in September 2017. Comparing that with September 2018, however, there was around 27 per cent de-growth in garments exports. In October, therefore, the export figure for textiles and apparel is not an appropriate indicator of actual growth,” said Rahul Mehta, president, Clothing Manufacturers’ Association of India (CMAI).
He said the rupee depreciation really helped India's growth in exports in the segment. "But, it remains to be seen whether the current growth continues. This is possible only when the rupee continues to depreciate against the dollar, but currencies from other competing countries, including China, Bangladesh and Sri Lanka, remain steady, which is highly unlikely," said Mehta.
The Center has offered several sops, including Merchandise Exports from India Scheme (MEIS), a package of Rs 60 billion last year, to boost exports.
The domestic textile industry is projected to reach $250 billion by 2019 from an estimated $150 billion in November 2017.
India's textile and apparel export stood at $39.2 billion in FY18 and is expected to increase to $ 82 billion by 2021.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.