India seems to have missed the bus if trends for the first three months of the quota-free regime of global textile trade are anything to go by.
Readymade garment exports have fallen 24.3 per cent during January-March 2005, according to data compiled by the Directorate-General of Commercial Intelligence and Statistics.
Garment exports declined to $1.18 billion during January-March 2005 from $1.56 billion during the corresponding period in the previous year.
The sharp decline in the January-March quarter pulled down overall exports of readymade garments by 4.9 per cent to $5.5 billion during 2004-05, down five per cent from $5.79 billion in 2003-04.
This comes at a time when the export of textile yarn, fabric and products from China grew 24.8 per cent and readymade garments by 15.9 per cent, as per the data compiled by China's commerce ministry.
According to provisional data released by the DGCI&S, India's overall textile and clothing exports (including handicrafts, coir and jute) during 2004-05 declined by 3.4 per cent to $ 13.03 billion compared with $ 13.49 billion during April-March, 2003-04.
Apparel Export Promotion Council Chairman A Sakthivel said the appreciation of the rupee against the dollar and the 10 per cent cut in prices were responsible for the drop.
The government further aggravated the situation by reducing the duty entitlement passbook scheme and the drawback rates, he added. Exporters also said state levies were not refunded. They were added to the costs.
India was expected to be the second biggest beneficiary after export quotas were dismantled from January 1 this year. While Chinese companies invested heavily in capacity-addition and modernisation, Indian companies are perceived to have spent much lower amounts in this area.
Indian labour laws in the country were also cited as having inhibited exports and foreign investments in the sector.
The textiles ministry has sought inputs from exporters to work out an export strategy for the current financial year.
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