Textiles Ministry seeks export sops for yarn, fabric sectors

The Textiles Ministry has demanded sops for the yarn and fabric sectors, which it says were ignored in the five-year Foreign Trade Policy announced early this month.

It has also made a case for inclusion of garments in the interest subvention scheme being finalised by the Commerce Ministry to help the sector compete with Vietnam, Sri Lanka and Bangladesh, which get favourable access to developed markets.

“Officials from the Textiles Ministry have already held preliminary discussions on the matter with officials in the Commerce Ministry and the Directorate General of Foreign Trade. We have forwarded all the complaints that we had received from the industry. The Secretaries from the two ministries are also in touch,” an official told BusinessLine .

Flawed incentives

Man-made fibre yarn as well as woven and knitted fabrics, in addition to garments, have been extended a 2 per cent incentive (in the form of fully transferable duty scrips) in the EU, the US, Canada and Japan. However, sops in these markets do not help yarn and fabric producers as they export very little to these markets. The Merchandise Export Incentive Scheme (MEIS), however, ignores markets such as China, Bangladesh, Sri Lanka, Turkey, Vietnam and South Korea, which are major destinations for yarn and fabric from India.

“By excluding key markets, the policy has virtually ignored fabric and yarn producers, who also need support in the shrinking world market,” the official said.

The Textiles Ministry is also trying to persuade the Commerce Ministry to include garments and other sectors in the new interest subvention scheme being finalised by it. Under the scheme, exporters from select sectors will get credit at a 3 per cent subsidy for the next three years.

“The garments sector is facing a tough time competing with smaller economies such as Vietnam, Sri Lanka and Bangladesh, which get preferable access into the EU and US markets. Interest-rate subvention will give it some relief,” the official said.

The textile sector is the largest employment generating sector in the country, especially for low-skilled workers, and needs to be supported, he added.

The Merchandise Export Incentive Scheme ignores markets such as China, Bangladesh, Sri Lanka, Turkey, Vietnam and South Korea, which are major destinations for yarn and fabric from India.

(This article was published in the Business Line print edition dated April 29, 2015)

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Indian investment in Bangladesh garment sector to zoom

The investment by Indian companies in Bangladesh garment sector is bound to surge as Indian firms try to take advantage of the lower production cost in the neighbouring country.

It is estimated that Indian textile and garment companies have already invested Rs. 30 billion (US$ 600 million) in Bangladesh during the current fiscal 2011-12, and this investment is likely to rise significantly.

Last year, the Indian Government took a decision to permit import of 48 textile and garment items from Bangladesh at zero-duty. This has also contributed to the increase in investment by Indian firms in Bangladesh. Some Indian companies are even or relocating their production base to Bangladesh.

A major advantage to Indian companies investing in Bangladesh would be with respect to the cost of labour, as minimum wage there is just Rs. 1,700 compared to the minimum wage of Rs. 5,000 in India.

Garment imports from Bangladesh to India increased around three-times to US$ 22 million during the first six months of current fiscal.

Speaking to fibre2fashion, Mr. A Sakthivel, Chairman of Apparel Export Promotion Council (AEPC), said, “A lot of Indian companies have already invested and are going to invest more money in Bangladesh garment sector, because producing goods from Bangladesh will work out 20 percent cheaper for them.”

“The rise in Indian investments in Bangladesh, along with a surge in garment imports from Bangladesh is likely to negatively impact India’s garment exports. Moreover, Bangladesh companies may also enter and compete in India’s domestic market,” he added.

To protect India’s interests, he suggested, “The Government of India can do two things. First, the 10 percent excise duty on branded garments should be removed immediately. Secondly, the Government should insist that Bangladesh should use only Indian origin yarn or fabric to produce the garments which come to India.”

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Varanasi silk industry in trouble

In recent times, huge import of Chinese silk fabrics is posing a threat to the Varanasi silk industry, largely dominated by MSMEs. To voice this concern, the silk industry even observed a 1-day strike in late November 2010, but the Centre remained unmoved.

In recent times, huge import of Chinese silk fabrics is posing a threat to the Varanasi silk industry, largely dominated by MSMEs. To voice this concern, the silk industry even observed a 1-day strike in late November 2010, but the Centre remained unmoved.

The current scenario: There is 10% customs duty on silk fabrics and 30% on raw silk. On the contrary, the general trend followed worldwide is a lower customs duty on raw material over that of finished products.

To retain monopoly in the global silk fabrics export market, China has adopted a smart strategy, whereby it has increased raw silk prices to Rs 2,900 at present from Rs 1,750 in August 2010. However, current raw silk exports from China are almost nil, according to G K Kedia, convenor of Yarn Development Committee of the Banarasi Vastra Udyog Sangh (BVUS).

Consequently, China exports silk fabrics at skyrocketing prices and taking advantage of India’s reverse import duty structure, it is enjoying dumping of the same — adversely affecting the domestic silk fabric traders, which are mostly MSMEs.

In a major endeavour to protect the interest of the silk players, the Yarn Development Committee has recently written to the Finance Ministry and the Commerce Ministry requesting to abolish the import duty on raw silk and raise the same to 40% on silk fabrics.

“Huge Chinese dumping following inverted import duty structure, coupled with non-availability of requisite silk yarn is impacting the Varanasi silk industry,” said an official of BVUS to a correspondent on conditions of anonymity.

The problem

According to the government, the import duty on raw silk is higher to save domestic producers. But the point is that Indian raw silk is far below the quality of Chinese silk due to the following reasons:

•Poor cocoon quality
•Use of obsolete reeling machines to make yarn

Another disadvantage of Indian raw silk is that it needs twisting, while Chinese raw silk does not require twisting before use.

To add to the sector’s woes, domestic raw silk producers have raised prices at par with Chinese raw silk.

“Recent times have been really bad for the region’s silk players, primarily due to influx of Chinese silk at high costs,” said V Jamal, proprietor of Jamal Silk Palace, a small silk trader in Varanasi.

These factors have prompted domestic silk players to explore newer territories with zero import duty, such as Korea, Brazil, Iran and Vietnam.

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Manmade fibre industry seeks govt help

Soaring cotton yarn prices followed by 25-40 per cent rise in man-made fibres (MMF) across various categories since October 2010 is making the export industry see red.

Export of MMF textiles declined by one per cent to Rs 3,852 crore during the second quarter ended June 2010, compared to the corresponding period in the previous year. The export scenario worsened with exports dropping by around 20 per cent to Rs 3,464 crore in the second quarter ended September 2011 as against Rs 4,910 crore during the same period last year.

The Indian MMF export sector was one of the few segments that was not affected by the global economic crisis. Exports during 2009-10 had registered a growth of nearly seven per cent at Rs 16,900 crore.

Industry insiders said the decline in MMF exports was because of significant rise in raw material costs, weak demand in Dubai and introduction of anti-dumping duties for synthetic and polyester yarn in consuming countries like Peru and Brazil coupled with an appreciated rupee.

“Polyester and viscose fibre and yarn prices have been increasing on a day to day basis. Manufacturers are also faced with erratic and unreliable supplies from fibre companies. This is making it difficult for exporters to plan their shipments and to adhere to delivery schedules,” said VK Ladia, chairman of the Synthetic and Rayon Textiles Export Promotion Council (SRTEPC).

Ladia said the industry will not be able to meet the MMF export target of $370 crore set by the government.

“I do not expect the just-ended quarter (Oct – Dec 2010) to be any better and the last quarter will not be able to make up for the loss. We will not be able to meet the target and our exports will be around $ 340 crore.”

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Garment export growth may remain flat in FY '10

Being hit badly by recession in western economies like the US and Europe, which form the primary markets for Indian garment exporters, the industry may close the financial year 2009-10 at around $ 10 billion, similar to last year. While the latter part of financial year 2009-10 may have seen an improvement in western economies, garment exporters in India believe the impact of recession was bad enough to maintain a status quo in growth of garment exports.

"The first two quarters of financial year 2009-10 were really bad for garment exports. It was only from the third quarter that things began to improve. The good part is that instead of a major decline in growth, the industry might close this year at last year's level or a little less than that," said DK Nair, secretary general, Confederation of Indian Textile Industry (CITI). According to Nair, garment exports from India may be barely touch $ 10 billion in FY 2009-10 as against $ 10.9 billion of last year.

The industry, which comprises around 8,000-10,000 garment exporters, supplies garment mostly to the US and Europe. However, in order to improve the numbers, garment exporters are looking at newer markets like Australia and Latin America.

"Although the US and Europe markets are showing the signs of revival, the first half of the year was in doldrums. Upto November, garment exports were 7-8 per cent less than last year. It is the current season's orders that seem reasonably good. Hopefully, at the end of this year, we may close just about what we did last year. Since our main markets are badly hit, every exporter is now creating alternatives for himself, like newer export markets or domestic retailers," said Rahul Mehta, president of Clothing Manufacturers' Association of India (CMAI).

The fresh markets for garment exports from India include Australia, Latin America, Middle East and Japan, among others. However, SN Rangaiah, general manager (finance) at Gokaldas Exports Ltd. said the order books from these new markets is still relatively less.

"These markets are not voluminous in nature. Nevertheless, order books have been steadily growing since last two quarters. Some of the garment exporters are also looking at domestic market. But our past experience has been that money circulation is an issue in Indian retail scenario," said Rangaiah.

One of the largest exporters of garments in the country, Gokaldas Exports, which has a capacity of 300 million garments per month, has been witnessing an order book of Rs 250-300 crore per quarter.

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Efforts to push up synthetic textile exports

MUMBAI: In a strategic initiative aimed at augmenting the scale of the $3.4 billion man-made textile exports sector, the nodal body, Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) is organising ‘Source India 2010’, a B2B event to attract more buyers especially from the Gulf and African continent.

The event is to be held on January 28 and 29 in Mumbai under the aegis of the Ministry of Textiles and will showcase the latest range of world-class textile products from India.

Over 100 players from the industry would display their products.

Product range

The product range would include basic and fancy yarns, apparel fabrics, trimmings and embellishments, fashion accessories, home textiles, high performance clothing, and industrial and specialised clothing.

The global man-made fibre trade accounts for 60 per cent of total trade in textiles. G. K. Gupta, Chairman, SRTEPC, while addressing the media said India’s share in exports was below 3 per cent at Rs. 15,767 crore ($3.42 billion) in 2008-09. “Our vision is to capture 4 per cent of the market by 2011-12 and touch $6.2 billion.”

“The event will target small and medium manufacturers/exporters and will help consolidate India’s market position in the export markets,” he said.

Man-made fibre exports have been growing at a healthy 12 per cent annually over the last five years in spite of global slowdown.

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Maran pulls up cos for 'generalised' exports

NEW DELHI: Union minister for textiles Dayanidhi Maran on Wednesday criticised the ailing domestic industry for being too generalised in selecting export items and also concentrating only on US and European Union (EU) markets.

“We don’t look beyond USA and the EU, our product mix is very gen-eralized , our product basket is limited to tops, trousers, T-shirts and some hosiery items, our export basket does not contain any of the five of the yop trading textile goods in the world,” said Mr Maran at a function organised by FICCI on emerging global trends and the Indian textile industry .

He added that under the present scenario, the ministry has fixed a growth target of 12% to reach a market size of US$ 115 billion in the next five years and a global trade share of 7%.

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No end in sight to Tirupur dyeing units' stir

COIMBATORE: Even as the New Year has cheered the export prospects for thousands of knitwear units at Tirupur, what has dampened their spirit is

the continuing strike by the dyeing units in support of their demand for sharing the cost of effluent treatment by the Centre and Tamil Nadu Government.

On Monday, the indefinite strike spearheaded by Dyers association of Tirupur entered 11th day and the exporters are worried about meeting the delivery schedules on time. "If the strike continues further, it will be detrimental to the industry," said a leading exporter.

He said, garment making is a chain process and even if there is stoppage in one area of work, the entire chain will come to a standstill at some point of time.

Already the knitwear industry is incurring a production loss of around Rs 30 crore per day due to the strike. Only few big export houses have in-house processing facilities and it accounts for only 20% of total dyeing units in Tirupur.

Warsaw International’s managing partner Raja M Shanmugam told that the situation is getting worse for exporters, who are dependent on outsiders for dyeing and bleaching.

"January is a crucial month for us as the cluster is famous for cotton knitwear," he said, adding, the industry starts executing summer orders to Europe and US from this month onwards.

"If there are delays in shipments, then our buyers might move to our competitors in other countries like Bangladesh," he added.

He said, the shops in the ‘West’ display new collections month on month and if the shipments for any particular month is delayed then it will result in cancellation of orders.

"We are yet to gauge the reaction of the buyers, as they were on a holiday for the last two weeks due to Christmas and New Year. We have narrated to them the problems faced by the industry and are anxiously waiting for their response," he added.

The exporters usually incur penalty charges of around 20% of total cost of product for late shipments and another 15% will be lost for airlifting the consignments. "Since we are working on a wafer thin margin of 5% to 6%, the industry will incur 30% loss due to this strike," Mr Shanmugam added.

If exporters are the ultimate sufferers, the strike had started affecting other segments of value chain also. Tirupur-based Indian Dyes and Chemicals MD L Narayanaswamy said the business is almost down by 80% as only individual dyeing units are executing orders now. According to sources in Pure group, which is a major supplier of chemicals to units in Tirupur, " Normally, the dyeing units used to observe a token strike to highlight their stand on their pollution front. For the first time, the strike is continuing for long".

Further, they said, " those on strike are mainly the units forming part of the cluster group and which have set up common effluent treatment plants. Whereas, 16 to 17 major dyeing units, which have set up their own individual ETPS, have not joined the stir. They are also under pressure to support the agitation. Nearly 60% of our supplies go to these individual units and the rest to cluster units. To that extent, the stir has affected our business".

Tirupur Dyes and Chemicals Association president K Nagesh told ET that the dyes and chemicals companies in Tirupur are losing nearly Rs 3 crore sales every day due to the strike.

For tackling pollution, he said, low salt range dyes are available in the market but they are 25% to 35% costlier than the normal dyes. "However, using such products will reduce environmental pollution," he added.

In October, the Supreme Court imposed a penalty on dyeing units in Tirupur for cleaning river Noyyal and other water bodies polluted by the discharge of toxic effluents from their factories all these years. DAT general secretary K Krishnan told ET that the dyeing units are in the process of paying the penalties individually before January 5 this year as per Apex Court order.

"It has nothing to do with this strike. We are observing this indefinite strike mainly to get financial support from the state and central governments for complying with the strict pollution control norms," he said, adding, the association wanted the two governments to share about 75% of their ‘burden’ (Rs 800 crore) incurred in establishing and upgrading common effluent treatment plants to achieve zero discharge. He said, the 600-odd dyeing units participating in the strike are facing a production loss of Rs 9 crore daily. Also, the industry is afraid of losing 50,000 to 60,000 employees, who are in the process of returning to their native places in Southern Tamil Nadu following closure of dyeing units for the past ten days.

"In today’s scenario, it is very difficult to retain work force and we are trying to keep them in Tirupur by paying wages despite strike," Mr Krishnan said. Industry sources added, the workforce have mostly left the city and are not expected to return till Pongal festival is over by mid-January.

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Vietnam to surpass India’s share in apparel exports

VietNamNet Bridge – Vietnam is going to pip India in the world apparel trade, as Vietnamese exporters are projected to surpass the share of the Indian competitors in the global market in 2009, said The Economic Times.

India this year is expected to export apparels worth 9.2 billion USD against 8.78 billion USD in 2008, while shipments from Vietnam are likely to increase from 8.4 billion USD last year to 10.08 billion USD in 2009, according to Apparel Export Promotion Council (AEPC) estimates.

Bangladesh, which has already overtaken India to hold the fifth position in the world textile trade, is projected to reach 12 billion USD in apparel exports, the AEPC said.

Major markets like the US and European Union, which are reeling under deep financial crisis, would prefer countries like Bangladesh, Vietnam and China over India, as they are sources of cheap imports, AEPC said.

Between January and October 2008, Vietnam exported 1.04 billion EUR of apparels to the EU, against India's 3.38 billion EUR. However, in terms of growth, Vietnam's shipments increased by 10.25 percent, while India posted a marginal increase in the period.

Vietnam's share to the US increased despite exports from the Southeast Asian nation have been put under the US scanner of anti-dumping mechanism.

With the monitoring programme having ended, the exporters from Vietnam would have unrestricted access to US stores, the AEPC said.

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Relief likely for crisis-hit apparel exports sector

New Delhi, Jan. 23 The Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, would convene a high-level meeting of different government departments on February 5.

The meeting is being called to address the core concerns of the apparel industry, particularly its export segment, badly hit by the ongoing recession in the overseas markets of developed countries, according to the Minister of State for Commerce and Power, Mr Jairam Ramesh.

Garment fair

Addressing the garment industry representatives at the ongoing India International Garment Fair in Gurgaon, Haryana, where over 350 established apparel manufacturers and exporters have been showcasing their speciality wares, Mr Ramesh said that the need for tackling the crisis in the garment industry arose out of the fact that in 2008-09, the garment exports from India would be lower than Bangladesh, while Vietnam would overtake India before long.

While India would end up exporting garments worth $8.8 billion this fiscal, Bangladesh is poised to export $12 billion worth of garments and China (excluding Hong Kong) at $115 billion.

He said that Vietnam would export $6 billion worth of garments this fiscal and would soon overtake India, if “we do not get our act together to improve the competitiveness of the Indian garment industry”.

Women workers

Considering the fact that six million people (a majority of them being women) work in the garment industry, the need for bolstering the industry in terms of safeguarding the livelihood concerns of people working in the industry assumes added significance, Mr Ramesh said.

Hence, he said, the “garment industry needs much more focused support than the real estate sector which some people have been championing”.

Earlier, in a presentation to Mr Ramesh, the Apparel Export Promotion Council Chairman, Mr Rakesh Vaid, said that all major announcements by way of fiscal stimulus measures were either a release of withheld benefits or restoration of benefits recanted lately.

He cited the case of Technology Upgradation Fund Scheme (TUFS) and Central sales tax/terminal excise duty payments and subvention of credit of 4 per cent withdrawn from October of which 2 per cent has been restored now.

He said exports in November were $621 million, a decline of 11 per cent compared withNovember 2007 and this fiscal apparel exports would be $8.78 billion, down 9.4 per cent as compared to 2007-08, he said.

Reviving activity

Pleading for a series of steps to revive activity in the crucial garment industry to help workers survive, the AEPC chief said all duty drawback rates might be notified at the rate of 14.61 per cent effective from September 2008, along with introduction of interest-free loans for investment in machinery and zero duty import of capital good scheme.

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Relief likely for crisis-hit apparel exports sector

New Delhi, Jan. 23 The Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, would convene a high-level meeting of different government departments on February 5.

The meeting is being called to address the core concerns of the apparel industry, particularly its export segment, badly hit by the ongoing recession in the overseas markets of developed countries, according to the Minister of State for Commerce and Power, Mr Jairam Ramesh.

Garment fair

Addressing the garment industry representatives at the ongoing India International Garment Fair in Gurgaon, Haryana, where over 350 established apparel manufacturers and exporters have been showcasing their speciality wares, Mr Ramesh said that the need for tackling the crisis in the garment industry arose out of the fact that in 2008-09, the garment exports from India would be lower than Bangladesh, while Vietnam would overtake India before long.

While India would end up exporting garments worth $8.8 billion this fiscal, Bangladesh is poised to export $12 billion worth of garments and China (excluding Hong Kong) at $115 billion.

He said that Vietnam would export $6 billion worth of garments this fiscal and would soon overtake India, if “we do not get our act together to improve the competitiveness of the Indian garment industry”.

Women workers

Considering the fact that six million people (a majority of them being women) work in the garment industry, the need for bolstering the industry in terms of safeguarding the livelihood concerns of people working in the industry assumes added significance, Mr Ramesh said.

Hence, he said, the “garment industry needs much more focused support than the real estate sector which some people have been championing”.

Earlier, in a presentation to Mr Ramesh, the Apparel Export Promotion Council Chairman, Mr Rakesh Vaid, said that all major announcements by way of fiscal stimulus measures were either a release of withheld benefits or restoration of benefits recanted lately.

He cited the case of Technology Upgradation Fund Scheme (TUFS) and Central sales tax/terminal excise duty payments and subvention of credit of 4 per cent withdrawn from October of which 2 per cent has been restored now.

He said exports in November were $621 million, a decline of 11 per cent compared withNovember 2007 and this fiscal apparel exports would be $8.78 billion, down 9.4 per cent as compared to 2007-08, he said.

Reviving activity

Pleading for a series of steps to revive activity in the crucial garment industry to help workers survive, the AEPC chief said all duty drawback rates might be notified at the rate of 14.61 per cent effective from September 2008, along with introduction of interest-free loans for investment in machinery and zero duty import of capital good scheme.

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Slump in Chinese textile market brightens prospects for India

After a tough phase, there seems to be signs of hope for the rupee-scarred Indian textile industry. This time, it is the slump in Chinese textiles that has brought some reason to cheer. Besides, neighbouring competing countries are also facing problems, brightening the prospects for Indian textiles.

Mr P. Sundar Rajan, Managing Director, SP Apparels, says: “In India’s case, this is true for the next two decades at least. Western buyers are now seriously looking at India. We have been getting enquiries from hitherto unexplored markets such as Hong Kong, Singapore and African nations.”

SP Apparels is the No. 2 exporting house in the country and owns brands such as Crocodile, Natalia and Crocokids.

Tirupur’s Royal Classic Group, which owns the brand Classic Polo, has already set up its marketing offices in Singapore and Malaysia sensing this opportunity.

Dragon in distress

Appreciation of the Chinese yuan, shrinking raw material (cotton) base and rising labour wages (30 per cent higher than that of India) are posing a serious threat to the Chinese textile industry.

These, in turn, have come as a blessing in disguise for the Indian textile industry that is now hopeful of emerging as a major exporter once again, overcoming one of its worst phases.

In January, the annual appreciation of the rupee was over 11 per cent, while the Chinese currency appreciated by 6.96 per cent. But when the rupee’s average appreciation dropped to 8.36 per cent in March, the yuan was up 8.52 per cent.

According to data available with the General Administration of Customs of China, textile and garment exports in the first half of this year fell 11 per cent year-on-year. Textile and clothing exports totalled $81.68 billion, the data showed. The customs report revealed that apparel export growth slowed to 3.4 per cent.

The country has registered a negative 2.57 per cent growth in exports to the US in January-February 2008. China is witnessing negative growth in the US for the first time in over a decade, industry sources said.

According to a recent survey by the China Cotton Textile Association across 17 provinces, nearly half of the textile companies surveyed wanted to quit and venture into other businesses and nearly 45 per cent have shifted their focus on the home turf.

Signs of sunrise

According to figures available with the US-based Office of Textiles & Apparel, during the first half of the calendar year, China posted a negative 2.43 per cent growth ($13,834 million) in textile and apparel exports to the US, while India registered a 1.89 per cent growth ($2,742.291 million).

Apart from China, the recessionary trend is also being faced in neighbouring competitors Sri Lanka and Bangladesh.

Hit by an economic downturn, Sri Lankan textile units are on a staff downsizing mood, while labour unrests owing to low wages and rising food prices plague Bangladesh’s textile sector.

‘cautious approach’

“China’s pain is India’s gain. It’s true that we have ample opportunity but we have to consider the spiralling raw material costs, rising cost of production and insufficient power problems here.

Most of the companies are not able to pass it on to the overseas buyers and we should have a cautious approach,” said Mr D.K. Nair, Chairman, Confederation of Indian Textile Industry (CITI).

On the raw material front, prices of cotton are on the decline for the past 3-4 days and industry sources expect it to slide further in the coming days, much to the relief of the textile sector.

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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.

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Vietnam takes over India in apparel exports to US

NEW DELHI: After China, a small Asian country Vietnam has overtaken India in apparel exports to the lucrative US market, it shipped garments worth 4.76 billion dollars in May this year against India's exports of 3.14 billion dollars.

Out of the total 73 billion dollars annual imports by the US till May-end, Vietnam managed to capture 6.55 per cent share while China remained the largest exporter to the American market with 30.6 per cent share, a data released by the US Department of Commerce said.

Admitting tough competition from Vietnam, Confederation of Indian Textile Industry Secretary General D K Nair said: "Garment exports from Vietnam to the American market have shown an unprecedented growth of 36.39 per cent as compared to negative growth of 0.72 per cent from India in May."

On Vietnam's growth, he said cost competitiveness has given the country an edge over Indian exporters, who had been hit by rupee appreciation against dollar last year. However, the rupee has begun depreciating and situation might improve.

Industry insiders pointed out that a large number of Chinese manufacturers have shifted their base to Vietnam to benefit from low production costs there and it was pushing the country's apparel exports growth.

The neighbouring Bangladesh shipped garments worth 3.18 billion dollars to the US market while capturing a share of 4.37 per cent in the world's largest market.

Figures compiled by the US Commerce Department revealed that Mexico and Indonesia are also ahead of India, which stood at the sixth position in apparel exports to the US.

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Export sops withdrawal hits textile players

AHMEDABAD: Just about the same time when they thought that everything was working out in their favour, came yet another damper. Even as the Indian textile industry awaits imported cotton to ease the price pressure from the commodity in the domestic market, exporters anticipate poor economic policies to stifle their prospects in 2008. Trailing behind most of its Southeast Asian counterparts in terms of growth in exports to the US, the recent move by the government to withdraw interest rate subvention on export credit is set to stagnate the prospects of the textile industry in 2008.

Exporters who were benefited in the post-quota regime, took a beating in 2007 after the dollar began to slide. The Indian textile exports at $20.5 billion fell short of the $25-billion target. Despite a global slowdown and a slump in consumption in the US — the country consumes 30% of Indian textiles — exporters hoped to revive business in 2008 by tapping the fashion-driven European market where it grew by 2.8% in January 2008 over the previous January.

But, everything doesn’t seem to be in order for the textile exporters.

In what is understood to be a measure to check inflation, the Reserve Bank of India on August 1 called off the export incentives it declared earlier in wake of rupee appreciation, with effect from September 30. Under the interest subvention scheme, the exporters were compensated for reduced profits because of strengthening rupee last fiscal and got a near 4.5% relief in pre-shipment and post-shipment credit in various sectors, especially employment-intensive sectors such as textiles and handicrafts.

The withdrawal will set the manufacturing costs reeling under pressure from all fronts — high prices of cotton and man-made fibres and shortage of power in the sub-continent, and global recession making consumers shy away from new spends — and increase their burden to an extent that their competitiveness in the global textile market will be affected severely, textile secretary AK Singh said.

India has already lost out Vietnam, Bangladesh and Cambodia in terms of growth in the US market during January-May 2008 over same period last year. The Bangalore-based Gokaldas Exports, which is the largest exporter of Indian textiles, recorded a turnover of Rs 990 crore in 2007-08 with exports down 20%,“The government’s decision will further cripple the exporters. We are finding it difficult to pass on the price hike to our global buyers who have the option to go to Bangladesh, which has silently pulled the rug from underneath our feet, Orient Craft CMD Sudhir Dhingra said.

The Confederation of Indian Textile Industry has sought that the interest subvention be continued up to March 31, 2009 without any changes to sustain export competitiveness of Indian players vis-à-vis their Asian counterparts, said CITI secretary-general DK Nair. “Pakistan has announced R&D assistance at 6% for garments, while China has increased the rates of VAT refund from 9% to 13% for synthetic textile products and 11% to 13% for others,” he said.

CITI chairman PD Patodia echoed him, saying that the add-on costs will further worsen the situation.“Exporters with pending orders cannot go back on their quotations despite the fact that the move to waive off interest rate subvention on export credit will directly add to their input costs. At a time when the industry is working out measures to cut costs and increase productivity, this move will be detrimental,” associate director, Technopak Advisors Pvt Ltd, Prashant Agarwal, said.

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Bureaucratic barriers to Cotton exports

NEW DELHI: In a move that is perceived to be restricting cotton exports, government has made registration of overseas contracts compulsory with the Textile Commissioner in Mumbai.

The Directorate General of Foreign Trade has asked the customs authorities not to clear shipments unless the export contracts are verified.

Cotton prices have shot up by 42 per cent since January resulting in a high raw material cost for yarn mills.
While the government scrapped cotton import duty on July 8, yielding to the mills demand, prices have not corrected.
A demand has also been made to ban exports, but the Agriculture Ministry is opposed to the ban, which is believed to have the support of the Textile Ministry.

"The contracts for export of cotton will be registered with the Textile Commissioner prior to shipment. Clearance of cotton consignments by Customs should be after verifying that the contracts have been registered," a DGFT notification said.

The Confederation of Indian Textile Industry (CITI), which spearheaded the July 9 strike by yarn mills is happy at the move for compulsory registration of cotton export contracts.

"The association had requested the government for the same. This will help government to keep a watch on the quantity of exports," CITI Secretary General D K Nair said.

"It would act as an enabling procedure for government to take informed policy interventions, if required," Nair said. However, exporters resent the move on the ground that it amounts to creating barriers.

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No plans to cut or ban import duty: Pillai

NEW DELHI: Government is not planning to slash import duty on cotton or ban its exports as demanded by the textile industry for boosting supplies and easing prices in the domestic market.

"At the moment, there is no plan to cut the import duty on cotton," Commerce Secretary Gopal Pillai said.

At present, there is a 10 per cent customs duty and four per cent import tax on cotton.

He also ruled out any plans to ban cotton exports as being demanded by textile mills since cotton prices in the global market were ruling lower than those in the country.

There is no point in banning exports at a time when the international prices are lower than the domestic prices, he said. The domestic cotton textiles industry has been demanding duty-free import of cotton to boost supplies and bring down prices that have increased by over 35 per cent in the last one year across varieties.

While the prices of Punjab cotton have shot up by 60 per cent, those of Gujarat variety increased by about 50-55 per cent.

According to the Confederation of Indian Textile Industries, India has exported about 85 lakh bales of cotton, which can go up to 100 lakh bales in the next 3-4 months.

Pillai added that the Commerce Ministry is holding discussions with the Textile Ministry to work out plans to help the labour-intensive sector.

The textile industry, one of the worst hit by the over 13 per cent rupee appreciation last year as well as rising input costs, has witnessed 3.5 lakh job losses this year.

"Textiles is a cause of worry. We are now trying to see what we can do," Pillai said.

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Bangladesh exports garments to India duty free for first time

DHAKA: Bangladesh has exported garments to India for the first time under a duty-free access deal seen as a breakthrough for the country's fast-growing textile industry, an official said on Monday.

Neighbours Bangladesh and India signed the deal last September, allowing Dhaka to annually export eight million garments duty-free across the border, an agreement hailed by New Delhi as a "milestone" in trade relations.

"Our companies have for the first time in history shipped garments to India this month under a duty-free access deal," said Anwar-ul Alam Chowdhury Parvez, president of Bangladesh Garments Manufacturers and Exporters Association.

"We've exported a small quantity, but it's a giant leap for the industry. It is projected that India's ready-made garments market would top 100 billion dollars by 2012. Our target is to get a slice of this huge market," he added.

Bangladesh, which has a two-billion-dollar trade gap with India, last year exported more than nine billion dollars of textiles, mainly to the United States and the European Union.

The country's textile export market is growing rapidly, spurred by a weak Bangladeshi currency and a sharp increase in production costs in China and Vietnam, its main global rivals.

The improvement in trade relations comes against a backdrop of sometimes tense relations between the neighbours.
India helped Bangladesh win independence from Pakistan in 1971 but ties in recent years have often been soured by border skirmishes for which both sides blame the other.

Indian officials regularly accuse Bangladesh of harbouring militants fighting New Delhi's rule in India's far-flung northeast.

Dhaka denies the charge and says New Delhi allows Bangladeshi criminals to take refuge on its soil.

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India replaces China as top exporter to Bangladesh

DHAKA: India has regained its position as the number one import source for Bangladesh, beating China, in the first nine months of the financial year ending June 30, official figures said.

This is mainly due to large-scale imports of rice and onion from India after Bangladesh faced a series of natural calamities last year.

Besides, analysts said, India, as the current chair of the South Asian Association for Regional Cooperation (SAARC), has also gone out of its way to woo the least developed countries among the member-nations, of which Bangladesh is one.

China has been the number one import source for Bangladesh during 2005-06 and 2006-07.

"India is set to dominate the Bangladesh market as importers here are shifting from China," a senior commerce ministry official was quoted by the New Age newspaper as saying.

Bangladeshi importers find imports of essentials from the next-door neighbour convenient in many ways, he said.
Bangladesh Bank's figures showed the country imported Chinese goods worth $2,292.12 million during July-March of the current fiscal year that ends this month-end.

The amount was 15 percent of the country's total imports during the period.

But imports from India figured $2,454.83 million or 16 percent of overall imports.

Bangladesh imported $14.64 billion in merchandises in the nine months between last July and March this year.
Food items, especially rice, onions and fresh fruits accounted for the bulk of imports from India.

Traders said surging inflation in India and China were pushing up prices of imports from these two Asian giants, which account for more than 30 percent of Bangladesh's imports.

Indian annual inflation rose to a 14-year high of 11.42 percent for the week ended June 14, while Chinese annual price inflation hit 7.7 percent in May, a 12-year high.

Bangladeshi imports from India amounted to $2,226 million in 2006-07 fiscal year, against $2,537 million-worth imports from China during the same period.

In 2005-06 fiscal, Bangladesh imported Indian goods worth $1,846.91 million while imports from China stood at $2,050.99 million. Once again, the two countries shared about 30 percent of Bangladesh's total annual imports that year.

Until the 2004-05 fiscal, India had been traditionally the biggest source of Bangladesh's imports, mainly foods and raw materials for many industries, including apparels.

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Textile exports to US show rising trend, beat Rupee blues

NEW DELHI: Despite rupee appreciation, Indian textile and apparel exports to the US for 2007 showed a marginal increase in value terms over the previous year, even as unit value realisation came down. The US comprises 25-30% of Indian textile and apparel exports and so growth in exports to the US means exporters may have been able to successfully handle the rupee appreciation.

The steep rupee appreciation of last year had hit textile exporters earnings in rupee terms and had blunted their competitive edge in international market. As the crisis deepened many exporters were finding it tough to garner new business contracts, leading to decline in textile export figures in several months of the last year. The scene, however, seems to have improved as the year closed.

According to the latest US government data, US textile import in value terms increased 3.35% in 2007 over the previous year, while volumes increased only 1.84%, clearly showing that the per unit prices paid by US importers in dollar terms were higher in 2007 compared to the previous year. But for Indian exporters per unit realisation actually went down, as is evident in its growth figures for textile exports in value and volume terms.

Indian textile and apparel exports to the US rose in value terms to $5,103 million in 2007, up 1.45% over previous year. The volumes, however, were marginally better. It went up 2.56% to 2722 sq meter equivalent (sme).

“Textile and apparel exporters cut prices to retain their market share. Therefore, the unit value realisation for exporters came down even as they managed to marginally increase their export in value terms,” says Confederation of Indian Textile Industry secretary general D K Nair.

In the apparel segment, however, Indian exports to US increased in volume (from 840 sme to 867 sme), but declined in value (from $3186 million to $3169 million). “There is more competition in the apparel category compared to textile. We face stiff competition from low-cost producers such as China and Bangladesh,” explains Mr Nair.

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