The Hindu Business Line : Textile exports to US may grow 10% as demand picks up

India’s total textile exports to the US is estimated to grow by 10 per cent as of March 2008, said Ms Shashi Singh, Joint Textile Commissioner, Government of India.

“After the slowdown in exports due to rupee appreciation during the first few quarters of 2007-08, there seems to be some pick-up in demand in January and February with exports to the US growing by almost two per cent,” she said, speaking to newspersons on the sidelines of an Indo-US seminar on the prospects and problems in the small and medium enterprises (SME) sector, here recently.

Fall in China exports

Ms Singh attributed the recovery in demand to the slowdown of textile exports from China to the US. “The appreciation of the local currency of China and the high labour cost has led to a squeeze in their margins, and hence, there is a decline in exports from China,” she said.

China currently accounts for almost 25-30 per cent of textile exports to the US. It is difficult for India to scale up its exports to this level immediately as it does not have the kind of production capacity to meet the demand, she said. There is a revival in the textile and garment industry in India with industry accepting new standards, she added.

“Earlier, 80 per cent of Indian trade was in dollar terms. However, now most of these industries are shifting to other currencies such as the euro,” Ms Singh added.

The market size of the total Indian textile industry in 2006-07 stood at $54 billion, with domestic demand accounting for 65 per cent at $35 billion and exports contributing 35 per cent at $19 billion (with export to the US at $5 billion), while imports stand at five per cent at $2.76 billion.

Ms Singh expects the textile industry to grow to $115 billion in the next five years by 2011-12, with exports contributing almost 48 per cent at $55 billion. The total investment forecast stands at $37 billion during the period, she added.

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