McKinsey sees 15-18% growth in textile exports

McKinsey & Co has predicted that India's textile exports will grow 15-18 per cent annually to touch $25-30 billion by 2013 if institutional reforms, including removal of infrastructural bottlenecks and amending labour laws, and measures to facilitate the availability of high quality raw materials are initiated.

The DHL-McKinsey Apparel and Textile Trade report has said India can emerge the second-biggest winner after China, once export quotas are dismantled in January 2005.

In the absence of reforms, textile exports are projected to grow 8 per cent a year, against the present 6 per cent growth.

It has also said India's share in global textile trade "" estimated at $248 billion "" is expected to increase to 6.5 per cent by 2008, from the current 4 per cent.

India, China and Pakistan have been termed "clear winners" in the post-quota era, while Vietnam, Sri Lanka and Bangladesh have been classified as "stayers" and are expected to maintain their current export volumes.

According to the study, at 35 per cent of the US levels, the productivity of Indian exporters is much lower than countries like China, which are operate at around 50 per cent.

The report has advocated bilateral agreements with the US and European Union, the two largest trading blocs, in the quota-free regime to remain competitive against cheaper exporters like Sri Lanka.

"Other countries, such as Hong Kong, Indonesia, Korea and Thailand, will need to overcome serious competitive disadvantages to avoid declining exports," the report said.

It has also said local manufacturers need to reform their organisation structures and ensure lower rejection levels and delays in shipments.

The DHL-McKinsey report has said attracting foreign investment should be a key priority through initiatives like dereservation of remaining items relating to the textile industry and reduction in import duties on fabrics and garments.

Also, simplification of the tax structure through the introduction of a uniform value added tax and improvements in Customs procedures and port facilities will help increase exports.

Growth curve

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• India can emerge the second-biggest winner after China, once export quotas are dismantled in January 2005
• India's share in global textile trade "" estimated at $248 billion "" is expected to increase to 6.5 per cent by 2008, from the current 4 per cent
• India, China and Pakistan have been termed "clear winners" in the post-quota era
• India's share in global textile trade is expected to increase to 6.5 per cent by 2008, from the current 4 per cent