Indian Textile Export Target Of US$ 45 Billion Is Unachievable Say Industry Experts

Trade & Policy

Indian Textile Export Target Of US$ 45 Billion Is Unachievable Say Industry Experts

India’s textiles industry, which has been struggling due to increasing competition from the neighbouring countries like Bangladesh, Indonesia and Vietnam, coupled with rising imports into India and other domestic issues like GST, is now feeling the pinch of a strengthening rupee.

The industry has almost ruled out the possibility of achieving its total export target of US$ 45 billion in the current fiscal.

According To Confederation of Indian Textile Industry (CITI) Chairman Sanjay Kumar Jain, “Exports were down by 40% in October, followed by 13% in November. In December too, the exports came down sharply. If the trend continues, the projected textile export target of US$ 45 billion in the current fiscal will be clearly unachievable. The industry may even find it difficult to attain last fiscal’s export of US$ 40 billion.”

“While rupee appreciation is a major factor, another threat looming is a further rise in cotton prices, which has gone up from Rs 37,500 a candy in November to Rs 41,500 now. Given the fluctuation in both the rupee and cotton prices, exporters are unable to take orders or fix any price point to do jobs,” he said.

Textile exports from India include readymade and knitwear garments, cotton yarn, fabrics, made-ups, handicraft items, man-made yarns, fabrics and jute products, among other items.

Former president of Tirupur Exporters’ Association (TEA) and Chairman of Poppys Knitwear, S Sakthivel said, “We are suffering. Rupee appreciation over the last few months will certainly impact our exports as well as bargaining power. Though orders are flowing in, exporters are not able to fix an exact rate due to rupee appreciation. With severe competition from neighbouring countries on prices, the rupee appreciation will leave us in the lurch.” The industry is already burdened with issues such as duty-drawback and GST rates, he added.

A senior TEA official said, “An appreciation of every one rupee against the US dollar will see Tirupur exporters losing Rs 35 crore a month on their total monthly exports of about Rs 2,300 crore. At an all-India level, the loss is estimated to be around Rs 150 crore a month.”

It is estimated that total readymade garment exports from India has declined to Rs 78,966 crore in the April-December 2017 period as compared to Rs 83,430 crore in the same period of the last fiscal. Of the total exports, exports in US dollar terms are estimated at 55%, in Euro at 30% and in Pound Sterling at 12%, he said.

He said that out of the total exports from Tirupur, nearly 10% of the big exporters garner 50% of total export value while 90% of small scale exporters account for the remaining 50%, and the impact of rupee appreciation will be more severe on SMEs.