Home / Knowledge / News / Textiles / Volume of global trade expected to shrink in 2009
Volume of global trade expected to shrink in 2009
24
Jan '09
A Sakthivel, President of Federation of Indian Export Organisations (FIEO) presented Interactive Session on Measures to Stimulate Economy and Exports with Commerce & Industry Minister and Deputy Chairman - Planning Commission.

1. The volume of global trade is expected to shrink in 2009 for the first time since 1982 due to the continuing global economic slowdown. US has entered into recession and growth is projected to be minus 0.3%, Europe will grow by minus 0.7 % and Japan will witness a growth of minus 0.2% in 2009. South Asian countries, pursuing exports led growth, are also feeling the heat now with contraction of demand in US and recently in China.

Indian exports show a mild decline of 1.2% in Dec 2008 compared with decline of 12.4% and 9.8% in Oct and Nov respectively. However, exports declined by 18 per cent in the textile sector, and 21 per cent in gems and jewellery, while handicrafts' overseas shipment fell by 64 per cent in December. Going by this trend coupled with no increase in world trade, for the first time in a decade, exports may have a negative growth in 2009. Manufacturing sector continues to be in red. As per recently released IIP data for November, 2008, the production of cotton textiles, man-made fibre textiles, leather and fur products, basic chemicals, metal products, transport equipment and other manufacturing industries contracted in November.

2. Order booked position of Indian companies are dis-heartening. We are loosing export orders to our competitors by narrow margins due to additional sops given by them whereas we are not provided a level playing field to compete with them.

China, Pakistan, Bangladesh have given additional benefit to their industry in the form of higher VAT Rebate for exporters, Support in the garb of R&D facility etc. The export VAT has been increased by China for the fourth time, in last four and a half months, from 9 to 13% and for some products even to17%. On account of Drawback only, China has 5-6% advantage over Indian products particularly in Garments and Textiles, Leather, Light Engineering products etc .One can very well say that China should not be cited as example but one cannot ignore that China is benchmark for pricing and unless you match China price ,you may loose a sizable share of your exports.

Despite reduction in CRR, Repo rate and Reverse Repo rate, PLR of the banks continue to be high. After 2% interest subvention, export credit ranges between 9 to 11.5%. The exporter availing term loan pays over 14% whereas his competitor pays between 4-6% in South East Asia and less than 2% in Europe and US. The interest differential of 4-6% is making us uncompetitive.

There is no scheme to rebate State and local taxes/levies which itself for few products in certain States works out to be 5-6% of FOB Value. Unless the same is brought under GST, Government should factor it in Drawback/DEPB and other instruments.

All refund due to exporters are marred by procedural inefficiencies at the implementation level. At times drawbacks are held up, Excise rebate are not cleared for months and there is enormous delay in getting refund of service tax. The cost of getting refund including manpower, paper work and related charges works out to be 2-3% of fob value.


Must ReadView All

Courtesy: Raymond

Apparel/Garments | On 28th Jun 2017

Raymond plans to invest Rs 1,400 crore in Amravati plant

Raymond, Indian textiles and apparel major, has decided to invest Rs...

Textiles | On 28th Jun 2017

GST and textiles industry: Analysis and opinion

The Goods and Services Tax (GST) is at long last all set to be rolled ...

Textiles | On 28th Jun 2017

India probing dumping of polyester yarn by China

Indian government is probing anti-dumping allegations against a...

Interviews View All

Riddhika Shah
SS Homme

'Worsted wool is the ideal fabric for menswear'

Sanjay Desai & Ashish Mulani
True Colors

Digital textile printing will be the technology of the future

Pinkesh Jain
Everflow Petrofils Ltd

‘An innovative technology which India needs desperately is the...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
July 2017

July 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search