Unlike most other sectors of Indian industry and exports, the Indian MMF textile sector remained unaffected by the recent global financial crisis and even achieved positive growth until recently, said Shri Vinod K. Ladia, newly elected Chairman of The Synthetic & Rayon Textiles Export Promotion Council.
Exports during 2009-10 registered a growth of nearly 7% at Rs.16,861 crores (US$3534 million) as against Rs.15767 crores (US$3426 million) during 2008-09.
However of late the MMF textile exports have started to experience the worst ever crisis due to global as well as domestic factors. As a result exports of MMF textiles declined by 1% to Rs.3852 crores during April-June 2010-11 from Rs.3898 crores in the corresponding period last year. The export scenario further worsened as exports dropped by around 20% to Rs.3464 crores in the second quarter of 2010-11 as compared to exports at Rs.4910 crores during the same period of the last fiscal year.
It may be pointed out that exports to even established markets like the UAE and Saudi Arabia besides upcoming and growing markets like Pakistan and Afghanistan witnessed a negative growth during this period. While external factors like the global economic slowdown, sluggish recovery in the US and the European markets, intensifying competition from China are some of the reasons for the fall in exports what has been crucially affecting the exports of MMF is the abnormal and unprecedented increase in the prices of raw-materials such as fibre and yarn.
The drastic reduction in the Duty Drawback rates, and the appreciating Rupee against the US Dollar have further aggravated the situation for the exporters of Synthetic textiles. According to the SRTEPC Chairman, exports of MMF textiles are likely to fall short of the target of US$ 3.7 billion fixed by the Government for 2010-11. The Government's ambitious plan to increase exports to US$ 7 billion by the year 2013-14 will also be hit.
Prices of polyester staple fibre have been increasing on a daily basis. Polyester yarn prices have gone up by 40% from October this year. Further, the exporters have also reported about the non-availability of fibre & yarn on time with the supplies by the manufacturers becoming erratic and unreliable. This is making it difficult for the exporters to plan their shipments and to adhere to the delivery schedules prescribed by the overseas buyers.
In this context the Council has sought the intervention of the Government in stabilizing the fibre & yarn prices and to ensure its availability for export production at international prices. SRTEPC has also urged the Government to immediately increase the Duty Drawback rates for 2010 -11.
Synthetic & Rayon Textiles Export Promotion Council (SRTEPC)
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