India's post-quota textile exports to EU, US decline; FICCI news
20 June 2008

Mumbai: Smaller countries like Vietnam, Bangladesh and Pakistan have wrested the advantage in textile and clothing exports from India, raising their exports to markets like the US and the EU in the post-quota (2005-2007) period, according to study by industry body FICCI.

Vietnam increased its share in EU25's imports of textile and clothing from 0.8 per cent in 1995 to 1.6 per cent in 2007 while Bangladesh improved its sixth position in 2002 to fourth in 2007.

Vietnam is fast catching up with India in the US market even as   India has just managed to keep its rank intact in EU market at number three.

While the appreciation of the rupee had been an important reason for the country's poor performance in the export markets, there has been some signs of a turnaround lately, the study said.

While several textile companies are investing heavily under the technology upgradation fund scheme, some firms are also trying to expand their manufacturing bases to other countries through either acquisitions of greenfield plants or by taking over firms in low-cost economies, the study noted.

The FICCI study said the main cause of the declining trend in India's textile and clothing exports has been a hardening of prices in the post-quota period in the EU market. As a result, India's share in the EU textile imports declined from 7.9 per cent to 7.5 per cent between 1995 and 2007.

In the US market, India's average price for textile exports declined in the post-quota period, but were still higher than China's and Pakistan's prices, the study noted.

India's share in US imports of textiles and clothing increased by just 1.6 per cent between 1995 and 2007, whereas that of Vietnam increased from 0.04 per cent to 4.7 per cent and that of China went up from 11 per cent to 33.5 per cent.

India was the third largest exporter of textiles and clothing to the US market. However, in value terms, the country's exports were just 1/6th of China which was the largest supplier in US market.

In volume terms, Pakistan was the second largest exporter of textiles and clothing to the US in 2007 and India was the fourth largest supplier. Vietnam, which exported only $17 million worth of clothing to the US in 1995, exported $4.35 billion of clothing in 2007 as compared to $3.2 billion exported by India.

India was the third biggest supplier in the EU25 market with a share of 7.5 per cent in 2007.

India's average growth rate, however, is higher at 15.4 per cent in post-quota period (2005-07) against 4.4 per cent in 1996-2004.

There has, however, been a declining trend in growth of India's textile and clothing exports to the EU since 2005. Exports to the EU was 18.6 per cent in 2005 which declined to 14.9 per cent in 2006 and 12.6 per cent in 2007.

India's share has remained almost constant in EU25 for the last 13 years and its average growth rate (1996-2007) has been lower than EU imports from the world, for the same period.

Whereas, average growth rates of China, Bangladesh and Vietnam were not only greater than India but also greater than the EU25's average growth rate of global imports for the period 1996-2007.   


 search domain-b
  go
 
India's post-quota textile exports to EU, US decline; FICCI