Fear of Decline in Business of Indian Garment Exporters
Recently, there has been an increased fear of Indian textile exporters being replaced by Bangladesh and Vietnam.
Reasons for India losing market to competing countries:
- Uncontrolled exports of cotton and cotton yarn to other countries are leading to decline in local supply of these items as raw materials and increase in their prices.
- India’s cotton and cotton yarn exports have grown by 56 per cent in the last six months, while the apparel trade in global markets has grown by only 24 per cent.
- There has been a sharp increase in cotton prices ranging from 30 percent to 80 percent.
- Besides, the imposition of 10% duty on imported cotton in the budget announcement has also increased the cost of production.
- The Indian textile industry is fragmented, and is dominated by the unorganized sector. The small and medium scale industries involved are using obsolete technology. Many inflexible labor laws exist.
- The average size of apparel units in India is 100 machines, which is very low compared to Bangladesh, with an average of 500 machines per factory.
- There is a lack of foreign investment.
- Bangladesh has become the second largest garment exporter after China. In the last eight years, Vietnam’s textile exports have registered a growth of about 240%.
Recently launched initiatives:
- Technology Up-gradation Fund Scheme: TUFS
- Scheme for Integrated Textile Parks: SITP
- Amended Technology Upgradation Fund Scheme: ATUFS
- Technology Mission for Technical Textiles: TMTI
- Integrated Processing Development Scheme: IPDS
Source – The Hindu
