India's Textile Imports Rising

Market News

India's Textile Imports Rising

India's textile and apparel imports are rising at a brisk pace even as exports are falling. While the export slump is ascribed to a host of factors, including global demand slump and the continuing inability of Indian exporters to have the desired competitive edge in key markets, the double whammy that demonetisation and goods and services tax (GST) dealt to the unorganised sector, the backbone of the domestic textile and clothing industry, appears to have necessitated increased imports. Weavers, fabric processors, texturisers and garment units in key textile hubs have borne the brunt of the twin policy steps taken in quick succession, in what impacted domestic supplies significantly. Textiles and garment imports, as percentage of such exports, surged from just about 13% in FY14 to a record 25% in the first eight months of this fiscal. Similarly, at 1.7%, the share of textiles and garments in the country's overall imports in the April-November period was the highest in recent memory. On the other hand, the labour-intensive sector's share in the overall merchandise exports has been sliding consistently in recent years, having dropped from as much as 13.7% in FY16 to just 10.27% this fiscal (up to November), the lowest in at least a decade. In the April-November period, while textile and garment imports surged 18.6% y-o-y, albeit at a relatively low base, to US$ 5.5 billion (despite a contraction in overall merchandise imports), exports plunged by 7.9% to US$ 21.7 billion, showed the DGCIS data. Importantly, imports of cotton fabrics and made-ups jumped as much as 17.3% y-o-y to US$ 396 million.