Exports of cotton textile, which was estimated to grow at around 23 per cent, is likely to achieve a growth rate of only around 13 per cent in the current year. During the first nine months of the current year, exports of cotton fabrics - madeup and yarn - rose by 13.8 per cent to Rs 9,673 crore. This growth is significantly lower when compared with the 33 per cent growth rate achieved in 1996-97.
Financial crisis in the South East Asian countries and economic slowdown have caused a major drop in exports growth. Exports in terms of US dollar edged up by 10.2 per cent to $2,650 million during April - December 1997.
The current situation is likely to continue for at least six months, says R Vasudevan, secretary, Texprocil.
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He adds that the economic crisis of far eastern countries has depressed Indian exports. Apart from decline in prices, piling up of inventory in China, and the depreciation of South East Asian currencies have led to a decline in exports. Anti-dumping duty, particularly in gray fabrics, which has been in the news for four-five years has affected long term contracts with the European countries. Quota restrictions in cotton textiles, which will be eased in 2004, has also restricted the exports.
Data compiled by the Cotton Textiles Exports Promotion Council reveal that exports of $2,650 million for the first nine months of the current financial year are just about 70 per cent of the targeted exports of $3,800 million.
In the corresponding period of the previous year, the industry had achieved exports of $2,405 million which was about 78 per cent of the targeted exports of $3,100 million for 1996-97.
The exports of cotton fabrics and madeups at $1,431 million was 68 per cent of the targeted exports of $ 2,100 million. Exports of cotton yarn and sewing thread at $1,344 million was 72 per cent of the targeted exports of $1,700 million.
The total exports, including synthetics and woollen textiles, rose by 16.1 per cent to Rs 12,221 crore in April-December 1997 from Rs 12,248 crore in April-December 1996. The product wise break-up of exports show that shipments of cotton fabrics are up by about three per cent to Rs 2,997 crore from Rs 2,912 crore. Cotton yarn exports rose by 18.6 per cent to Rs 4,445 while exports of cotton madeups increased by 21.4 per cent to Rs 2,228 crore. Exports of synthetics textiles rose by 18.7 per cent to Rs 2,623 crore, cotton handloom by 23.3 per cent to Rs 1,402 crore and woollen products by 13.2 per cent to Rs 419 crore.