The Hindu Business Line : No quotas, but no buoyancy either in textile exports

While the textile industry envisaged a flood of orders to descend on Indian manufacturers and prices to slide because of the elimination of quota costs, there have not been substantial increases in exports of most cotton textile and yarn product categories.

According to Mr M.P. Gajaria, Advisor, GTN Group, the only sector that has seen a substantial increase is the home textiles and made-ups segment, which registered a 14 per cent increase in exports in dollar terms between April 2004 and January 2005. Even fabric exports fell by 5.11 per cent, while cotton yarn rose by around two per cent in dollar terms in the same period.

Earlier, exporters chafed under restrictions in accessing the US market. However, with the constraints now gone, the orders have not been flooding in as envisaged. Mr Gajaria said part of the reason was competition from neighbours such as Pakistan and China. Pakistan's cotton yarn, for instance, the 30s count, is 10-15 per cent cheaper than India's. Similarly, China's cotton yarn was significantly cheaper than India's. These contribute significantly to the cost-competitiveness of the end product, making Indian products seem more costly. Domestically, Mr Gajaria said, while consumption of cotton had increased, it was unlikely to match CAB's (Cotton Advisory Board) predictions for the year.

He said going by the half-yearly estimates, cotton consumption by organised mills was likely to be only 163 lakh bales for the year ended October 2004 to September 2005, compared to CAB's predictions of 168 lakh bales for the year.

Similarly, he estimated SSIs' consumption at 16 lakh bales, while the CAB has estimated that it would hit 17 lakh bales this year. For the year October 2003 to September 2004, the offtake was 150.25 lakh bales from the organised sector mills and 13 lakh from SSIs.

According to Mr Sandesh Saxena, Senior Manager (Exports), GTN Textiles Ltd, an increased demand scenario had not extended itself to the yarn and grey fabric market.

Despite the prices of cotton and cotton yarn witnessing a correction over the last three months, exports had not seen much growth. The general market trend had also been lacklustre.

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