27/02/2015

IndiasMacroeconomicOutlookforTextilesandGarmentsCY2015

IndiasMacroeconomicOutlookforTextilesand
GarmentsCY2015
IndiaInfolineNewsService|Mumbai|December26,201419:06IST
IndiasTextilesandGarmentsindustry,whichaccountsfor14%ofIndiastotalindustrialproductionand
4%ofIndiasGDP,isconsideredasoneofthesignificantcontributortothenationaleconomy.After
witnessingchallengesduringtheyear2013andformostpartof2014
givenunfavorableeconomicconditions,theIndiantextilesandgarmentssectorhasseenreversalof
trendsinsecondhalfof2014.Withdomesticandglobaleconomicconditionsgraduallyimprovingalong
withthefocusedeffortsmadebyMinistryofTextiles,Indiantextiles
andgarmentssectorissetforgrowth,buoyedbyrevivalindomesticconsumptionandexportdemand.
ImproveddemandfromtheUSmarket,risingcostoflabourinChinawouldprovideboosttotheIndian
textileexports
Indollarterms,thetotalvalueoftextileproductsexportedfromIndiatouchedUS$35.4bninFY14,
whichwas12%highercomparedtoFY13.TheUShasbeentheprimarymarketforIndiantextile
exportersandaccountsforthemajorshareofIndiastextileandgarmentsexports.AspertheUSDept.
ofCommercesOfficeofTextilesandApparel(OTEXA),IndiantextileandapparelexportstotheUS
haverisennearly7%duringJanOct2014ascomparedtothepreviouscorrespondingperiod.During
thesameperiod,textile/apparelexportsofChinatotheUSincreasedby1.5%.
Indiasgrowthintextileandapparelexportscanlargelybeattributedtothesteadygrowthindemand
fromtheUSmarket.Inadditiontothis,othersfactorsthatarecontributingtoIndiastextilegrowthstory
are:
ContinuingslowdownintheChinesetextileexportstotheUSduetorisinglabourcostsandpower
shortages
NoncomplianceoftextilesunitsinBangladeshtotheglobalsafetystandards
LabourunrestinCambodiastextileplant
HighcostofcreditinVietnam
AppreciationofIndonesiancurrencyduringJanuary,2014
AllthesefactorscombinedtogetherareexpectedtoenableIndiatosignificantlyturnarounditstextile
industry.Also,witheconomicscenariointheUSgraduallyimproving,thedemandfortextileproductsis
expectedtoimprovefurther.ThiswouldhelpinthegrowthofIndiastextileexports.
InitiativestoimprovetextileindustryinIndia
WhileUSandEUcontinuetoremainprimarymarketsforIndiantextileandgarmentproducts,Indian
governmenthastakenvariousinitiativestoreduceIndiasdependenceonthesemarkets.Inorderto
encouragetextileexporterstofocusonnewmarketsandreducetheirrelianceonUSandEU,the
government,undertheFocusMarketScheme,introduceddutycreditscripwhichthetextileexporterscan
availonexportto26additionalcountriesapartfromexistingdestinations.Inadditionin2013,theIndian
governmentsignedMOUswithgovernmentsofvariouscountriessuchasMauritius,Tehran,Japan,
Uzbekistan,Romania,SriLankaandMyanmarinordertoprovideboosttotheIndiantextilesector.
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27/02/2015

IndiasMacroeconomicOutlookforTextilesandGarmentsCY2015

RecentlythegovernmentalsopassedtheTextileUndertakings(Nationalisation)Laws(Amendmentand
Validation)Bill,2014toensureproperandeffectiveimplementationoftherevivalschemeforsick
textileunits.InBudgetFY15,asumofRs5bnwasallocatedfordevelopingtextilemegaclusterat
VaranasiandsixmoreatBareilly,Lucknow,Surat,Kutch,BhagalpurandMysoreandalsoallocatedRs
100mntosetupaTradeFacilitationCentreandaCraftsMuseumtodevelopandpromotehandloom
products.
Inaddition,theMakeinIndiacampaignlaunchedbythegovernmentintendstoprovideafurtherboost
totheIndiantextileindustryandenableitachieve20%growthinexportsandsustain12%growthratein
domesticmarkettill202425assuggestedbyreportofexpertcommitteeonVision,StrategyandAction
PlanforIndianTextilesandApparelSector.Thecampaignalsofocusedonprovidinginvestment
opportunitiesforforeigncompaniesandentrepreneursacrosstheentirevaluechainofsynthetics,value
addedandspecialityfabrics,fabricprocessingsetupsforallkindsofnaturalandsynthetictextiles,
technicaltextiles,garmentsandretailbrands.
TheseinitiativestakenbytheIndiangovernmenttoprovideboosttothetextileindustrycoupledwiththe
recentdevelopmentsintheglobalmarketareexpectedtowidentheexportmarketsforthetextile
exportersandalsohelpindrivingtextilegrowthinthedomesticmarket.

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