New taxation regime, intense competitive pressures in the global market and uncertainty in the neighbouring markets, particularly in the Gulf region, have cast a shadow in the exports of textile and apparel, which saw a marked decline of 4% to Rs 2,27,902 crore in the just ended fiscal 2018 as compared to Rs 2,38,168 crore reported in the previous fiscal.
According to data provided by the Confederation of Indian Textile Industry (Citi), of the total commodities exports from India, the textile and apparel exports share has come down by a percentage point to 12% in fiscal 2018 from 13% in the previous fiscal.
While the textile exports declined marginally by 1% to end the fiscal 2018 at Rs 1,20,223 crore as compared to Rs 1,21,709 crore, and that of apparel exports saw a sharp drop of 8% to Rs 1,07,679 crore as against Rs 1,16,459 crore in the fiscal 2017, the Citi data said.
In March 2018 alone, the apparel exports was down 19% to Rs 9,695 crore Rs 11,946 crore in the corresponding period.
Similarly, exports of cotton yarn, fabs, made-ups, handloom products together declined marginally to Rs 65,969 crore as against Rs 66,160 crore in fiscal 2017. Made-made yarn, fabs, made-ups grew 2% to Rs 31,089 crore (Rs 30,559 crore earlier) and that of handicrafts (excluding handmade carpet) declined by 9% to Rs crore in fiscal 2018 as Rs 12,917 crore in the fiscal 2017, the Citi data said further.
In US dollar terms, the textile and apparel exports for fiscal 2018 almost saw a flat growth or 0.4% decline to $35.364 billion as compared to $35.514 billion in fiscal 2017. Here too, the textile exports grew 3% to $18.65 billion ($18.146 billion earlier) and that of apparel exports declined by 4% to $16.714 billion ($17.368 billion), the data said.
During the fiscal 2018, imports of textile yarn, fabric, made-ups grew 17% to Rs 11,838 crore (Rs 10,079 crore earlier) and in dollar terms imports grew 22% to $1.836 billion ($1.502 billion).
Some of the reasons for decline in exports were owing to transition to the new taxation regime and intense competition from neighbouring countries such as Bangladesh, Taiwan, Indonesia as well lack of FTAs with major importers.
The decline has been primarily driven by the sharp fall in exports to the UAE market, which had emerged as one of the prominent apparel export destinations for India, with its share increasing to 23% in FY17 from 12% in FY14.
Particularly for the ten-month period ending June 2017, India’s apparel exports to UAE had grown at a sharp pace (56% year-on-year). Thereafter, apparel exports to the UAE have fallen at an equally fast pace, by as much as 45% since June 2017.
Excluding the trade with the UAE, India’s apparel exports are estimated to have stood 3-4% higher in the ten months to FY18, the Icra analysis pointed out.
Source: financialexpress.com