India likely to miss $45b textile export target in FY18.

April 5, 2018

Textile and garment exports are likely to miss the USD 45 billion target for 2017-18, as the industry reels under the impact of GST roll out and tariff advantages enjoyed by competitors like Bangladesh and Vietnam, according to textile industry body CITI. “At best, we will come close to USD 40 billion,” CITI (Confederation of Indian Textile Industry) President Sanjay Jain told PTI, terming it a “disappointing year”. In fact, shipments from the textile and clothing sector have consistently missed annual targets set by the government in at least the previous three financial years, since 2014-15.Analysis of data put out by the DGCIS (Directorate General of Commercial Intelligence and Statistics) under the commerce ministry, reveals the true picture of shipments from the sector. During the April-February 2017-18, exports of readymade garments of all textiles stood at Rs 97,983.99 crore, registering a 6.25 per cent decline over the same period last year. In February alone, shipments witnessed a steep 13.86 per cent fall. In dollar terms, the country’s textile and apparel exports stood at USD 37.25 billion in the calendar year 2017.According to Jain, the domestic textiles and apparel industry faces a big threat from rising imports due to the removal of countervailing duty and special additional duty in the Goods and Services Tax (GST) regime. Textile industry experts feel another negative factor is that the effective duty drawback, whether it is the remission of state levies (RoSL) or the Merchandise Exports from India Scheme (MEIS) which allows duty credit scrips as rewards, has come down for the sector post implementation of GST, thereby hitting export margins. Signing free trade pacts with major markets like the European Union, US, Canada and Britain can equalize market access positions with key competitors like Bangladesh and Vietnam. Bangladesh has zero duty access to EU, whereas Vietnam is on its way to acquire duty free access under a trade agreement, jain noted. The sector expects the government to at least partially compensate the industry in the interim period.    –PTI

Source: RMG BD