The Hindu Business Line : Ban on Chinese textiles boosts Indian export growth

THE clampdown on Chinese textile exports by the US and the EU seems to be working in favour of Indian exporters, who raked in big sales in these markets in 2005 in most of the products where Chinese shipments have been curtailed.

In case of items such as cotton skirts, knit fabric, cotton hosiery, synthetic filaments, woven shirts, and cotton shirts, where Chinese shipments have faced a clampdown in the US and the EU, Indian exports to these markets have clocked triple-digit growth against the average 25 per cent growth.

For instance, Indian exports in the cotton skirts category to the US clocked volume growth of 220 per cent and value growth of 190 per cent, much of which has been attributed to increased sourcing following the clampdown on China.

According to the US Department of Commerce's Office of Textiles and Apparel (OTEXA) data, in the case of the cotton hosiery segment - one of the 21 product categories where the US imposed restrictions on Chinese shipments - Indian exports till December 10 showed an increase of 238 per cent over last year.

In the cotton skirts category, Indian exports to the US registered a growth of 215 per cent, while growth was 183 per cent in the knit blouse segment. In the knit fabrics segment, the growth in the US market was 189 per cent while the slacks segment saw growth of 144 per cent.

In the case of the synthetic filament segment, the growth of Indian exports to the US till December was a stupendous 6,700 per cent, albeit on the smaller base.

Following the flood of Chinese imports in the US during the first few months of 2005, the US and China had signed a three-year agreement on textile trade under which import of 21 types of clothing and textiles were restricted.

The agreement provides for a progressive increase in imports of major textiles and apparel products from China - by 10-15 per cent in 2006, 12.5-16 per cent in 2007, and 15-17 per cent in 2008.

The EU also negotiated a "special" quota deal with China in June to stem the flooding of its markets with Chinese textile and garments.

Following the clampdown on exports in 2005, the Chinese Ministry of Commerce has started issuing textile quota certificates for 2006.