Ministry of Textiles


NOTE ON INDIAN TEXTILES AND CLOTHING EXPORTS
(Updated on 30th April, 2009)


The Indian textiles industry contributes substantially to India’s exports earnings. The export basket consists of wide range of items containing cotton yarn and fabrics, man-made yarn and fabrics, wool and silk fabrics, made-ups and variety of garments. India’s textile products, including handlooms and handicrafts, are exported to more than a hundred countries.
However, the USA and the EU, account for about two-third of India’s textiles exports. The other major export destinations are Canada, U.A.E., Japan, Saudi Arabia, Republic of Korea, Bangladesh, Turkey, etc.

2. In the post-quota period, India has emerged as a major sourcing destination for new buyers. As a measure of growing interest in the Indian textile and clothing sector a number of buyers have opened their sourcing/liaison office in India. Commercially, the buoyant retailers across the world are looking for options of increasing their sourcing from the Indian markets. Indian manufacturers are also pro-actively working towards enhancing their capacities to fulfill this increased demand. India’s textiles & clothing (T&C) export registered robust growth of 25% in 2005-06, recording a growth of US$ 3.5 billion in value terms thereby reaching a level of US$ 17.52 billion and the growth continued in 2006-07 as T&C exports were US$19.15 billion recording an increase of 9.28% over previous year. Though India’s T&C
exports in 2007-08 at US$ 22.13 billion were badly affected by strong appreciation of the Indian rupee against the US dollar, it still managed to record a healthy growth of 15.59% in US dollar terms (in rupee terms, the growth was about 2.76%).

3. In 2008-09, various export promotion councils and trade bodies have been representing to the Government that the textiles exports have adversely been affected by recent global economic slowdown, leading to considerable loss of employment in the textiles sector. Textiles & clothing exports during April-December’ 2008 amounted to US$ 15.27 billion as against US$ 15.25 billion in the corresponding period in the preceding financial year, recording a minuscule growth of 0.12%. A sector-wise analysis of textiles exports is given below:-

(i) Readymade Garments: Readymade Garments account for approximately 41% of the country’s total textiles exports. During 2007-08 the Readymade Garments exports have amounted to US$ 9.065 billion, recording an increase of 9.46 % over the exports during 2006-2007.

During the period of April-December’ 2008, the Readymade Garments exports have amounted to US$ 6.8 billion, recording an increase of 5.97% over the exports during the corresponding period of 2007.

(ii) Cotton Textiles including Handlooms: Cotton Textiles i.e. yarn, fabrics and made-ups (Mill made/Powerloom/Handloom) constitute more than 2/3rd of our exports of all fibres/yarns/made-ups. During 2007-08 the Cotton Textiles exports have amounted to US$ 6.85 billion, recording a healthy increase of 23.14% over the exports during previous year.

During the period of April –December’ 2008, the Cotton Textiles including Handlooms exports have amounted to US$ 3.765 billion, recording a decline of 11.39% over the exports during the corresponding period of 2007.

(iii) Man-made Textiles: During 2007-08 the Man-made Textiles exports have amounted to US$ 3.176 billion, recording an increase of 32.38% over 2006-07.

During the period of April –December’ 2008 the Man-made Textiles exports have amounted to US$ 2.58 billion, recording a growth of about 12.07% over the exports during the corresponding period of 2007.

(iv) Silk Textiles: During 2007-08 the silk exports have amounted to US$ 0.657 billion, recording a decline of 6.88% over the exports during the previous year.

During the period of April –December’ 2008 the Silk Textiles exports have amounted to US$ 0.523 billion, recording a growth of 14.16% over the exports during the corresponding period of 2007.

(v) Woolen Textiles: During 2007-08 the woolen textiles exports have amounted to US$ 0.44 billion, recording a growth of 4.5% over 2006-07.

During the period of April –December’ 2008 the woolen textiles exports have amounted to US$ 0.379 billion, recording an increase of 22.66% over the exports during the corresponding period of 2007.

(vi) Handicrafts including carpets: During 2007-08 the handicrafts exports have amounted to US$ 1.45 billion, recording a growth of 6.31% over the exports during 2006-07.

During the period of April –December’ 2008 the handicrafts including carpets exports have amounted to US$ 0.858 billion, recording a sharp decline of 24.67% over the exports during the corresponding period of 2007.

(vii) Coir: During 2007-08 the coir exports have amounted to US$ 0.16 billion recording an increase of 9.86% over the exports during 2006-07.

During the period of April –December’ 2008 the coir exports have amounted to US$ 0.109 billion, recording a decline of 6.19% over the exports during the corresponding period of 2007.

(viii) Jute: During 2007-08 the Jute exports have amounted to US$ 0.326 billion, recording a growth of 25.32% over the exports during 2006-07.

During the period of April –December’ 2008 the Jute exports have amounted to US$ 0.242 billion, recording a decline of 2.35% over the exports during the corresponding period of 2007.

4. Impact of global recession on India’s textiles exports

i) India’s textiles and clothing export has observed ups and downs in recent times. It was anticipated that India with a strong supply chain linkage from fibre to garments would be a major beneficiary in the quota free regime and trends observed in Indian textiles exports during the first two years of post quota period also indicated this. However, for the Indian textiles industry which depends almost exclusively on domestic sources the strong appreciation of Indian rupee vis-ŕ-vis the US dollar in 2007-08 landed the textiles and clothing exports in a difficult situation. This was established by the fact that India’s share in global textiles and clothing exports in 2007 declined to 4% and 2.8%, respectively from 4.3% and 3.3% in 2006.

ii) In 2008-09, conditions prevailing worldwide have not at all been conducive for the textiles exports. The world is currently passing through a recessionary phase and the major markets like US, EU and Japan are facing financial crisis. In this environment, the textiles and auto sectors are the worst hit sectors, particularly as these are considered to flourish in good times. US, the single largest importer of textiles and clothing items, has observed a negative growth of 3.34% and 0.55% in its imports of textiles and clothing from the world and India, respectively during calendar year 2008. Even China which occupied about 33% market share in the US, managed to record a small growth of 0.97% during the same period. The other countries, which managed to register growth in the US markets are Vietnam & Bangladesh. Almost all other countries have shown negative growth. The overall US markets of textiles and clothing has shown a decline of 14.19% in the first two months of current calendar year and India has also recorded a decline of 13.77% in the same period.

iii) In 2008 EU’s overall imports of textiles and clothing recorded a growth of 7.32%, India managed to record a growth rate of 6.42%, while China, largest exporter with a share of 38.5% in EU, recorded a growth of 20.46%. In the current calendar year, India’s growth rate has slipped and recorded a decline of over 15% in January, 2009 over January, 2008 while EU’s overall imports of T&C also recorded a decline of 9.96%.

iv) Some of the reasons attributed to this decline are the financial sector meltdown and economic slow down in international markets, increased cost of production due to increasing raw material costs, power and other input costs which have affected the profitability of textiles and garments units in India and their exports. The liquidity crunch is another factor that is affecting the industry.

v) The Government introduced two packages of duty concessions, tax and interest rebates in December, 2008 and January, 2009 to provide stimulus to the economy in general to combat the recession.