Indian textile export prices need to be more competitive
In a study on 'India's Textiles and Clothing Exports in US and EU', FICCI has pointed-out that India's textile export prices were not as competitive as that of even smaller countries like Vietnam and Pakistan in EU and US markets in the post-quota period (2005 to 2007).
While, India's prices of textiles and clothing witnessed a declining trend in pre-quota period, but hardened in the post-quota period in EU market, FICCI study observed.
As a result, India's share in EU's textile imports from world declined from 7.9% to 7.5% between 1995 and 2007, FICCI study noted.
In US market, even though India's average price for textile exports declined in the post-quota period they were still higher than the China's and Pakistan's prices, FICCI said. Here also, FICCI noted that the share did not increase significantly.
India's share in US global imports of textiles and clothing increased by merely 1.6% between 1995 & 2007, whereas that of Vietnam increased from 0.04% to 4.7 %, and that of China went-up from 11% to 33.5% in the same period. Even Bangladesh seems to be catching-up fast in both EU and US market vis-à-vis Indian prices.
FICCI study further noted that India was the 3rd largest exporter of textiles and clothing in US market. However, in value terms its exports were just 1/6th of China which was the largest supplier in US market.
Also, FICCI study noted that in terms of volume, Pakistan was the second largest exporter of textiles and clothing to US in 2007 and India was the 4th largest supplier.
Vietnam, which exported only $ 17 million worth of clothing to US in 1995, exported $ 4.35 bn of clothing in 2007 as compared to $ 3.2 bn exported by India to US, FICCI said.
In EU, India was the third biggest supplier in the EU25 market and its share was 7.5% in 2007. India's average growth rate was higher in post-quota period than the pre-quota period i.e. 15.4% in 2005-07 and 4.4% in 1996-2004.
However, FICCI observed that there has been a declining trend in growth of our exports to EU since 2005. India's growth rate of exports to EU was 18.6% in 2005 which declined to 14.9% in 2006 and 12.6% in 2007.
India's share has remained almost constant in EU25 for the last 13 years and its average growth rate (1996-2007) has been lower than the EU's imports from the world, for the same period.
Whereas, average growth rates of China, Bangladesh and Vietnam were not only greater than India, but also greater than the EU25's average growth rate of global imports for the period 1996-2007, according to FICCI study.
FICCI study also observed that Vietnam's share in EU25's imports of textile and clothing has increased over the period of time. Its share was just 0.8% in 1995 which increased to 1.6% in 2007.
Vietnam's average growth rate in the post-quota (2005-07) and pre-quota period (1996-2004) were 25.6% and 11.1% respectively. Pakistan has seen its share declining in the EU market from 3.2% in 1995 to 2.9% in 2007.