Textile exports to US: rising volumes, falling value

Though volumes of exported goods surged during January-March this year, the dip in export value, primarily on account of the appreciating rupee and a sustained rise in the domestic interest rate regime, has translated into a 10-15 per cent dip in the realisation for most textile exporters during the last six months, according to industry estimates.

Over 60 per cent of India''s apparel exports are headed for the US.

As per the US Office of Textiles and Apparel data, during the first three months of 2007, India''s exports of textile and apparel products to the US declined 0.43 per cent in value terms even as export volumes surged 7.49 per cent against the corresponding period of the previous year.

China, on the other hand, has registered increases in both volume and value terms, up 24.86 per cent and 46.47 per cent respectively.

Other key exporting nations such as Pakistan, Sri Lanka and Indonesia, where local currencies have depreciated against the US dollar, have seen higher growth in value terms, even though export volume growth has not been significant. Pakistan''s textile exports to the US grew by 6.54 per cent in value terms even as the volume growth was only 0.57 per cent.

The downturn in Indian textile exports has prompted the Prime Minister to mandate the National Manufacturing Competitiveness Council with the task of suggesting measures to neutralise the effect of the surging rupee on textile exports.

The rupee has appreciated against the US dollar by 9.4 per cent on a year-on-year basis till May this year while the Chinese yuan appreciated by 4.68 per cent and the Bangladesh taka by 0.95 per cent.