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Textile sector registers `moderate' export growth
Lags behind China in tapping free quota regime

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UNTAPPED POTENTIAL: A view of a powerloom in Andhra Pradesh. India still has a lot of catching up to do with China.
UNTAPPED POTENTIAL: A view of a powerloom in Andhra Pradesh. India still has a lot of catching up to do with China.

Our Bureau

New Delhi, Feb. 27

The Government on Monday admitted to the country having failed to capitalise on the opportunities offered by the freeing of the global textile trade, having registered only a `moderate' export growth during the current financial year in contrast to the rapid gains made by the Chinese export juggernaut.

According to the Economic Survey, in the run up to the phasing out of quotas, studies have billed China and India as the main beneficiaries of the new global order in textile trade. "So far, while China's performance exceeded expectations, India's performance has not been satisfactory," it noted.

While India's exports of textile and clothing to the US increased by 25 per cent, China's exports went up 58 per cent. The difference was even starker in case of exports to the European Union. While India's exports were up 10.5 per cent, China increased its exports by 80 per cent. The US data for the first six months of 2005 shows that exports of textile and clothing of liberalised product lines from China grew by 242 per cent.

April-Nov figures at $9.3 b

According to the Survey, the huge increase in exports that was envisaged after the phasing of quotas was widely expected to be a key driver for the textile sector, which accounts for 20 per cent of the country's industrial output and 12-16 per cent of total exports. However, terming the actual growth in the sector as only moderate, the Survey noted that the exports of textile and clothing from India increased by 8.21 per cent to $9.3 billion in April-November 2005. "Moderate turnaround in the performance in the textile sector has become visible in increased production. Budgetary concessions, rationalisation of duty structure and assistance under TUFS have started paying dividend," it said.

(This article was published in the Business Line print edition dated February 28, 2006)
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