China's loss can be India's gain in textile market

BANGALORE: A fall in the export of textile and apparel from China to the United States during January-June, even as the value of India’s shipments remained unchanged, is sparking hopes of a shift in US orders from the world’s most populous nation to this country.

India, Vietnam, Cambodia and Bangladesh are among the few countries whose exports of textile and apparel to the US rose during the first six months of 2008 while the world’s biggest economy goes through a downturn.

However, China, Pakistan, Sri Lanka and Turkey have seen a slowdown in off-take from their US suppliers amid a drop in the value of the country’s textile and apparel imports.

“One can see some shift in orders from China to other countries, notably Bangladesh and India. We can possibly look at an additional $1 billion of exports happening out of India,” Rajan Hinduja, the MD of Bangalore-based Gokaldas Exports said. US importers are aggressively looking at alternate sourcing locations and India is high on the buyers’ list, he observed.

Official US statistics show that the country imported textiles and apparel worth $24.37 billion during Jan-June 2008, a 5.1% drop compared to $25.7 billion in the corresponding year-ago period. From 2004 to 2007, the country’s imports rose from $ 46.93 billion to $ 53.12 billion.

India’s exports to the US in the first six months this year remained barely changed at $1.42 billion from $1.41 billion while Vietnam’s grew to $824 million from $668 million. Bangladesh’s shipments went up to $832 million from $811 million.

The value of Chinese textile exports, on the other hand, fell from $9.7 billion to $ 9.5 billion, while Pakistan was down to $1.42 billion ($1.68 billion) and Sri Lanka $ 201 million ($ 245 million). Turkey clocked exports of $264 million from $313 million in the first six months of 2007.

Admitting that even while the US economic slowdown was hurting Indian exporters, Mr Hinduja said prospects were brighter for the months ahead, “If you look at the order flow happening for the spring/summer-2009 season, there’s still room for hope.”

Daljeet Singh Kohli, head of the private client group at Emkay Global Financial Services, was of the view that global buyers are looking at the cheapest-cost producer. “Indian exporters need to look at moving up the value chain and ensuring better realisations at a time when currency movement would be highly unpredictable,” he said.