India wrests back 4th spot in textile exports
After sliding to sixth position in the global ranking of textile and apparel exports in 2019, India has improved its position by returning to the fourth position.
As per the data of Geneva-based International Trade Centre, in
2017 India was the second largest exporter of textiles and apparels after China. While China had the largest chunk of the trade at $257 billion, India with $37.2 billion exports was ahead of Bangladesh, Germany and Italy.
By 2018, India started sliding down and landed on the fourth slot after China, Bangladesh and Germany with $37.1 billion exports. This was the time when the apparel exports to the UAE had started declining. Apparel exports to the UAE, which was growing fast in the previous years, started declining sharply after the introduction of GST and reduction of duty drawback rates in 2017. Between FY14 and FY17, the UAE had emerged as one of the prominent apparel export destinations for India with its share increasing from 12 per cent to 23 per cent. However, within one year UAE's share was down to
20 per cent.
By 2019, India's textile and apparel exports came down to $35.5 billion as the UAE exports continued to shrink. By then, India had slipped to the sixth position in the world ranking after China, Bangladesh, Vietnam, Germany and Italy. In the pandemic-hit
2020, exports further shrunk to $29.6 billion and India continued in the sixth position.
However, in 2021, India has improved its ranking by climbing up to the fourth position beating Germany and Italy.
"The growth in textile and apparel exports to
$41.5 billion has been due to several factors. Growth was supported by increase in value of the products as well as volumes. Input costs, which includes shipping cost and cost of raw materials, escalated in 2021," said Chandrima Chatterjee, secretary general of the Confederation of Indian Textile Industry.
According to her, India managed to remain competitive in the international market as manufacturers absorbed a large portion of the inflation. The government had paid the duty drawback dues and had introduced
RoSCTL. This helped the cash flow of the exporters and improved their competitiveness in the global market.
Chatterjee expects India to further move ahead in 2022 despite the cotton price rise. While cotton prices have moved up steeply in India, international prices too have remained firm. Indian manufacturers are working more on cotton and synthetic blends to negate the effect of price rise.
Further, the trade pact with the UAE is expected to improve exports of apparels. In the past two years, the government has corrected the inverted duty anomaly in the import of man-made fibre. Along with the PLI scheme, this will support the exports of man-made fibre products. Even in the last fiscal, man-made textile exports went up by 51 per cent.