Textile Industry Notches Negative Exports Growth

The Indian textile industry is undergoing a paradigm shift as it has traditionally hinged on exports but has registered a negative export growth in the financial year 2000-01.

As per the Cotton Textiles Export Promotion Council (Texprocil) figures, for the period 2000-01, export of cotton fabrics declined by 8.11 per cent to $1,418.65 million as compared with $1,543.82 in the corresponding period last year. The domestic textile industry contributes nearly 30 per cent of the country's foreign exchange earnings.

For the first quarter (January-March) of 2001, exports witnessed a fall by 10.52 per cent to $360.27 million as against with $402.64 in the corresponding quarter last year.

Senior executives at Century Textiles said, "The decline in exports is because of the US economy slow down, as US is a major market for cotton textiles."

However, the company is planning to curtail its production so as to create a balance between supply and demand and is looking at developing and penetrating the domestic market as price realisations is better on the home front.

A senior official from the textile commissioner's office said, "There is uncertainty in the domestic market as a result of Chinese dumping."

The major challenge facing textile manufacturers as they enter the new century is the need to improve its international competitiveness. China is perceived as a major player in world textile trade. The domestic industry's concern about the increasing Chinese competition arise from their competitive pricing. The organised nature of their industries, low labour costs and economies of scale provide a significant advantage to the Chinese industry.

K K Lalpuria, president (exports) of Welspun India, said that the domestic currency has not devalued as much compared with the Far east and south east Asian countries.