Textile concerns not to end with quota regime

The Indian textile industry, even after the end of quota-regime in 2005, would have to deal with challenges posed by bilateral trade agreements like the NAFTA and European Union's trade agreements with some of the Mediterranean countries.

Another challenge that the industry faces is the hidden subsidies provided by the Chinese government to its domestic textile industry.

Addressing the annual Textiles and garments exports conference, organised by Apparels and Handloom Exporters Association (AHEA), S B Mohapatra, textiles secretary, Government of India said, "the Indian textile industry would do well in creating stronger ties with neighbouring countries like Bangladesh and Sri Lanka. He further said India already had trade ties with Sri Lanka, but need to have larger volume of trade with the island nation."

Mohapatra said that any effort to improve the competitiveness of the Indian textile industry would have to necessarily take into account the southern states. "Around 45 per cent of the textile output in India is from the south and 50 per cent of India's garment exports comes from Tamil Nadu."

He said Andhra Pradesh and Karnataka were already gearing to meet the challenges of the post-quota regime. "Andhra Pradesh is gearing up to increase its textile exports. Three apparel parks are coming up in the state. Some of the major international buying houses are already located in Bangalore."

Speaking on the threat from China to the Indian textile exporters, Mohapatra said that apart from concealed subsidies, the Chinese exporters also have the benefit of an undervalued currency.

Garment exports from India between January and June 2003 were Rs 13,277 crore against Rs 11,139 crore during the same period in 2002. A report on the export performance, compiled by AHEA, said that the performance of Chennai and Tirupur during the period January and December 2001 and 2002 showed a downward trend which is expected to be reversed during the current year.

The garment exports from the southern states account for 45.35 per cent in terms of quantity and 36.7 per cent in terms of value.

While there is a marginal increase in terms of quantity over last year's performance, value-wise our share is 36 per cent, indicating a decrease in the realisation per piece, the report said.