The Indian Textiles and Clothing (T&C) industry has registered 5.37 per cent export growth in 2017 as against 3.94 per cent globally, despite the challenges of demonetisation and GST on the sector, Southern India Mills Association (SIMA) said here today.
“The Indian T&C exports increased from 35.5 billion US Dollars in 2016 to 37.4 billion USD in 2017 and textiles exports (yarns, fabrics and made-ups) were up by 7.82 per cent. Clothing exports (garments) increased by 2.82 per cent in 2017 compared to 2016,” SIMA chairman P Nataraj said today.
India remained the world’s second largest T&C exporter in 2017, accounting for 4.95 per cent global share, while China, the largest exporter, had 34.2 per cent share in 2017,he said.
Nataraj said countries like Germany, Vietnam, Spain and India are capturing the export space vacated by China, registering increase in exports in 2017.
In 2017,India sustained itself as the largest cotton yarn exporting country with a 25 per cent global market share. Yarn exports increased by 7.21 per cent in the year compared to 2016, Nataraj said in a release.
However, Vietnam with a 11.93 per cent global cotton yarn trade in 2015, increased its share to 18.13 per cent in 2017 and 23.93 per cent growth this year as China shifted its major volume of yarn imports from India to Vietnam, where there is zero duty.
Vietnam is not a cotton producer, but imports it and exports yarn to China, while Indian yarn attracts 3.5 per cent duty in China.
Nataraj said if the Indian spinning sector’s demand of extending MEIS benefit for cotton yarn export was considered, it would enable them have a level playing field, use surplusspinning capacity and convert 60 to 70 lakh bales of raw cotton into value added yarn for export, thereby creating jobs for thousands of persons and increase Forex. Recently,the Government extended MEIS (Merchandise Export from Indian Scheme) benefits for all textiles and clothing exports beyond June 30 2018, except cotton yarn, he said.
The stability and advantage in homegrown cotton prices in 2016-17 and 2017-18 cotton seasons had helped the industry mitigate the challenges, Nataraj said.
The delay in releasing export benefits like RoSL (Rebate on State Levies), refund of GST accumulated credits, TUF subsidies and also in announcing enhanced duty drawback rates have caused financial crunch for the whole value chain, especially the garment sector, he said.
The yarn market has gained momentum and unsold yarn stock level was one of the lowest in recent years. With increased fabric demand, yarn prices increased to some extent in mid May 2018 compared to the previous month, he said.Nataraj said demand for coarse and medium counts, especially open end yarn in the domestic and export markets has increased considerably and several mills have got advance bookings for a few months.
“Early refund and clearing of government dues will strengthen the financial position of exports and all other textile manufacturing units to revive from the financial crisis and capture emerging market opportunities,” he said.