The $45 billion target for 2017-18 is likely to be missed by Indian textile and garment exporters as the industry reels under the impact of the rollout of the goods and services tax (GST) and the tariff advantages enjoyed by rivals like Vietnam and Bangladesh, according to the Confederation of Indian Textile Industry (CITI).
Terming the fiscal ‘disappointing’, CITI president Sanjay Jain told a news agency that $40 billion is the closest that can be achieved. The country's textile and apparel exports stood at $37.25 billion in the calendar year 2017.The $45 billion target for financial year 2017-18 is likely to be missed by Indian textile and garment exporters as the industry reels under the impact of the rollout of the goods and services tax (GST) and the tariff advantages enjoyed by rivals like Vietnam and Bangladesh, according to the Confederation of Indian Textile Industry (CITI).#
Textile and clothing shipments have consistently missed annual targets set by the government in at least the previous three financial years. According to data from the Directorate General of Commercial Intelligence and Statistics (DGCIS) under the commerce ministry, during April-February 2017-18, exports of readymade garments of all textiles stood at ₹97,983.99 crore, registering a 6.25 per cent decline over the same period last year. In February alone, shipments witnessed a steep 13.86 per cent fall.
India’s textiles and apparel industry faces a big threat from rising imports due to the removal of countervailing duty and special additional duty in the GST regime, said Jain.
The steep up-trend in imports will only worsen the situation going forward, Chinese fabrics are entering India via Bangladesh, he added. The effective duty drawback has also come down for the sector after GST implementation, thereby hitting export margins.
The sector expects the government to at least partially compensate the industry in the interim period.
As China imposes around 3.5 per cent import duty on yarn from India under the Asia Pacific Trade Agreement (APTA) while offering duty-free access to Vietnam, India's cotton yarn exports to China have decreased by 49 per cent between 2013-14 and 2016-17, while Vietnam's exports to China have increased by 88 per cent during the same period. (DS)
Fibre2Fashion News Desk – India
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