In the post-quota regime, Indian textile industry is booming with export orders and is emerging as an alternative sourcing location.Globally, the textile export market is hotting up after the dismantling of the quota regime that restricted the developing countries from the free trade in textiles exports for a long period of time. Post-Multi-Fibre Agreement (MFA), China and India are gaining ground in the textile exports due to their sheer size and huge domestic markets. Indian textile sector has seen a reasonable rise in its export performance. Post-quota, India ranks second in the race for global market share and is recording positive growth rates in its exports to the US and the European Union. In the period between January-July 2005, exports to the US grew by 30-35% while exports to EU grew almost by 20%.
India’s performance has been better than many other Asian countries like Pakistan, Bangladesh, and Thailand, and even better than that of Turkey, which has a Customs Union with the European Union (EU). While there has not been a substantial increase in exports of cotton textile and yarn products, the home textiles and made-ups segment has done exceedingly well. On the other hand, Chinese exports to US since January 2005 have grown by almost 60% and control 17% of the US clothing market, up from 12% in December 2004. In the postquota regime, import prices have fallen by 25% in the US and by 15% in the EU in the 1995-2004 period.With intensifying demand in the US, import prices are expected to fall further in near future. However, the EU, with significantly less fall in prices, has emerged as a more profitable market than the US for India.
India, being an integrated player and with a presence in the entire value chain segments like cotton-to-textiles-to-finished garments can have major advantage in the world textiles exports. Most of the major apparel manufacturers in India are operating at full capacity to meet the growing global demand in the post-MFA scenario. |
