The over $50-billion domestic textile industry has appreciated the recovery in the US economy during the September quarter. But industry players have also expressed doubts whether the development will help the industry’s exports end with a positive growth in the current financial year.
The US economy, which grew at an annualised rate of 3.5 per cent in the July-September period, is the largest import market for domestic textiles, consuming close to 40 per cent of India textiles exports.
Gokaldas Managing Director Rajendra Hinduja said: “There is an improvement of 8-10 per cent in order flows, but prices are still under pressure. The first two quarters of the current financial year have not been good for exporters. While I believe the apparel segment may end with a growth of 5 per cent, it remains doubtful whether it will be replicated for the entire textiles exports.”
During the period April-September, the country’s textiles exports reported a decline of around 12 per cent on a year-on-year basis. Industry experts dithered on whether the second half could offset the decline seen so far.
Confederation of Indian Textiles Industry (CITI) Secretary General D K Nair said: “Since the recent growth in the US came on the back of the huge stimulus for several sectors, it is yet to be seen whether it would be sustainable. I do not see the domestic textiles sector posting a positive growth in exports in FY10. There could be an overall decline of 5 per cent in exports for the current year.”
If exports end up in the negative territory, it would be registering a decline in exports for the third consecutive year. Last year, textiles exports stood at $22.75 billion — a fall of 2 per cent over the previous year.
Raymond UCO Denim COO S K Gupta said: “It is too early to make an assessment. Retail buying in the US is crucial.”
Rupee rate too is a concern for the textile exporters. According to them, if the currency remains above Rs 46.5 against the US dollar, exports will see a revival within a quarter.
