Textile body expresses concern over decline in CAGR in December last year

The Confederation of Indian Textile Industry (CITI) has expressed concern over 3% decline in CAGR in textiles and apparels in December 2017 compared to December 2016. The exports of textiles and apparel stood at $2996 million during December 2017 as against $3075 million in December 2016. However, the cumulative export has slightly improved by 2% CAGR as the exports stood at $26,136 million in April-Dec 2017 in comparison to $25,721 million in April-Dec 2016.
Sanjay Kumar Jain, chairman, CITI said that the share of textiles and apparel exports in the All Commodity Exports (ACE) has also declined by 2% in December 2017.

Mr Jain while appreciating the cumulative increase in the textiles and clothing exports during April-December 2017 also expressed concerns over the consistent increase in imports of textiles and clothing during the same period. The imports of textiles during December 2017 stood at $165.34 million in comparison to $137.24 million in December 2016, registering an increase of 20.48%.

He also pointed out that as per the latest statistics released by Export Promotion Bureau of Bangladesh, India’s imports of garments from Bangladesh has reached $111.3 million during July to December 2017, indicating a sharp rise of 66% from $66.9 million during the same period last year.

Jain also stressed that the on-going scenario is negatively affecting the domestic yarn, fabric and garment manufacturers. He further stated that there is a greater need to impose safeguard measures such as rules of origin, yarn forward and fabric forward rules on the countries like Bangladesh and Sri Lanka that have FTAs with India to prevent cheaper fabrics produced from countries like China routed through these countries. Garment manufacturers in India have to pay duty on imported fabrics, while Bangladesh can import fabric from China duty free and convert them into garments and sell to India duty free. This is putting Indian garment industry at a major disadvantage and this figure is expected to go up in coming months.

At the same time, he pointed out that India can increase its exports of cotton yarn and fabrics provided the sector is restored with export incentives. CITI has been strongly representing the case of cotton yarn and fabrics with every government department, including PMO to enhance the competitiveness of the cotton yarn and fabric sector. He stated that at present India’s share of cotton yarn in world trade is 26% and it is declining steeply as the incentives given to the cotton yarn sector were withdrawn in 2014 and MEIS which was extended to the entire value chain was not extended to cotton yarn. Moreover, there are various state levies up to the tune of 8% on cotton yarn which are not refunded at any stage. Similarly, Fabric sector is not getting refund of state levies of around 6%. By including cotton yarn under MEIS and providing ROSL for fabrics, Indian can retain its competitiveness in the global market.