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US market tougher than EU for Indian textiles
Jul '10
While Indian textiles and apparel exports to US and EU slowed down at almost same rate in 2009, but competition seems to be harder for Indian textile exporters in US market as compared to EU market, noted FICCI in its analysis on textiles and apparel exports to EU & US. In addition to China, countries like Indonesia, Vietnam and Bangladesh have managed to perform better, despite recession, than India in US market in 2009 according to FICCI analysis. FICCI analysis noted that India's exports of textiles and apparel witnessed a negative growth of around 11% to both US & EU in 2009, but still managed to increase its share by 0.17% in both the markets.

However, FICCI observed that in US market, imports of textiles from countries like Indonesia, Vietnam and Bangladesh witnessed smaller decline than India. Also, these countries have seen slightly higher increase in their shares in US textiles and clothing market in the recession year 2009 over 2008, pointed out FICCI. The share of Bangladesh, Indonesia, Vietnam and China increased by 0.5, 0.4, 0.67 and 4.3 percentage points respectively in US imports in 2009 as compared to 0.17 percentage points for India. In fact, in 2009 Vietnam managed to surpass India in terms of share in US imports of textiles & apparels. EU & US are the major destinations of India textiles and together account for around two third of India's textiles and apparel exports.

Also, FICCI observed that in the last five years i.e. from 2004-09, while India's textiles & apparel exports to US grew by 4.2% per annum whereas those of China, Vietnam, Indonesia and Bangladesh witnessed growth of 15.3%, 14.5%, 8.9% and 11.5% respectively.

In EU market, while Bangladesh witnessed a positive growth of 3.6% in its exports of apparels but counties like China, Turkey and India which are other major suppliers to EU market, experienced negative growth in their exports of apparels in 2009, noted FICCI. India's share in EU market of apparel increased from 6.8% to 7.2% while that of Bangladesh increased from 7.5% to 8.9%.

While China's share in EU's apparel imports from third countries increased from 42.7% to 44.7% but that of Turkey fell slightly from 12.7% to 12.2%. In textiles, India's exports to EU witnessed higher fall than that from countries like China, Turkey and Pakistan. India's textiles exports to EU fell by 15.7% as compared to 12.9%, 15.3% and 9.8% fall witnessed by China, Turkey, and Pakistan's textiles exports to EU in 2009 as compared to 2008, noted FICCI. While Pakistan's share in EU textile market increased slightly but share of India, China and Turkey decreased in 2009 vis-a-vis 2008.

Also, FICCI analysis observed that in 2005 the share of Bangladesh in EU's imports of apparels was almost equal to that of India (around 6.2%). In 2008, the share of Bangladesh was 7.5% and India's share was 6.8% in EU's imports of apparels- a difference of 0.7 percentage points. But in 2009, this gap has further widened with the share of Bangladesh being 8.9% and that of India 7.2%- difference of 1.7 percentage points, noted FICCI.

Federation of Indian Chambers of Commerce and Industry (FICCI)

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