The Hindu Business Line : Chinese textile exports slip, India picks up in key US market

New Delhi, April 15 The Chinese textile juggernaut is showing signs of slowing down, a prospect that could come to the rescue the beleaguered Indian textile exporters.

For the first time since the opening up of the quotas, Chinese exports to the key US market have registered a negative growth amid reports of a massive labour crunch in the mainland and an appreciating yuan.

The spillover from the 3 per cent decline in Chinese exports to the US during January-February 2008 could be coming India’s way, with textile and garment exports from India to the US registering a healthy 8.26 per cent increase during the period, even as Vietnam emerged as the biggest winner of the Chinese slowdown.

While Vietnam clocked a 43 per cent growth in textile exports to the US during the first two months of this year, Bangladesh registered a 7.5 per cent increase. Pakistan, another big player, recorded a 6 per cent decline in growth in exports to the US during the period. Data from the key European market is still awaited, even as experts are viewing the slip in China’s export performance in light of talks of an overall slowdown in the Chinese textiles sector.

Difficult year

Chinese textile firms are projected to face their most difficult year in 2008, with the appreciating yuan, rising raw material costs and massive labour crunch poised to take a toll on its export.

Many textile firms of China’s southern provinces have been forced to move their production bases to the inland provinces to cut costs. There are reports of a big decline in exports from the Guangdong Province, the largest textile products export base in the country. Vietnam is being seen as a direct beneficiary of the Chinese slowdown, even as the situation offers other competitive textile players from countries such as India and Bangladesh to capture market share in key markets such as the US and the EU.

Rupee gain

The appreciation of rupee and the resultant decline in exports has been hampering the prospects of the Indian textile industry, with an estimated 350,000 workers already having been rendered jobless, according to industry estimates.

“The decline in Chinese export growth in the US would offer benefits to other players in the market. It seems that India could definitely be one of the key beneficiaries of the spillover effect. What is even more important is that the unit value realised for each metre of cloth exported has been improving in case of India’s exports to the US, while its been declining for most other countries,” Mr D.K. Nair, Secretary General of Confederation of Indian Textile Industry, said.

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