Chinese textile team urges post-WTO collaboration

India and China should avoid competing head-on in the global textile market after the elimination of quotas in 2005 under the World Trade Organisation (WTO) rules, and should instead aim to do business together, a trade delegation from China indicated here today.

China would source cotton yarn and cotton fabrics from India, while India could procure dyes intermediaries and chemicals from China along with fancy yarn, the Chinese textile delegation visiting units in Ahmedabad to tie up cotton yarn and fabric supplies from January 2005 onwards said.

"We want to understand the Indian textile industry and identify a joint venture partner. We have a good distribution network in exports but we are poor in cotton products for which we plan to work jointly with some Indian company."

Shoi Li Ke, general manager, Changsshu HTC Import & Export Co Ltd, and a member of the Chinese delegation, told Business Standard.

The textile delegation was visiting India under directions of the Chinese ministry of textiles to source cotton yarn and fabric.

An Indian delegation had visited China in September 2003 under the Indian ministry of textiles to identify trade opportunities after the phasing out of quotas.

The end of quotas was expected to lead to expansion in the global trade in textiles from $360 billion at present to $560 billion in the next five years.

The Indian textile industry was expected to grow from $13 billion today to over $50 billion in five years.

"Both countries can work together. We can import Indian cotton yarn and cotton fabrics and India can import dyes intermediates and chemicals and fancy yarn from China," said delegation member Zhao Jian Sheng of Changshu Sun Kam Kwong Printing and Dyeing Co Ltd.

Raghav Gupta, associate director of KSA Technopak, said, "The world is eying at India. In the last few years, international collaborations of some Indian textile companies have revealed the potential of India".

Small and unorganised textile manufacturers should work in clusters like Truchi and Ludhania to face the international challenge after 2005, he added.

The average efficiency level of Indian textile companies was around 40 per cent as compared to 65 per cent of the Chinese companies.

"Indian producers need to increase efficiency," Gupta commented. The phasing-out of quotas from January 1 would lead to a shift of production facilities to low-cost countries like India and China.

China was expected to make major gains in the US clothing market and raise its market share from 15 per cent in 2002.

India's share in the world textiles market was expected to double as well.