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Textile and Clothing sector performance stable in 2007

16 Feb '07
1 min read

The Textile and Clothing sector performance in 2007 is reported to be stable.

Fitch Ratings expects steady export growth in 2007.

The sector was helped by dismantling of quotas from 2005 which in turn generated increase in exports in 2005 and 2006.

India's Textile and Clothing sector has undergone capacity expansion over last three years and similar trend is expected to continue in 2007.

The Government has supported the T&C sector in the form of a 5 percent interest subsidy on term debt for capital expenditure, under Technology Upgradation Fund Scheme (TUFS).

Indian T&C companies have gone in for acquisitions of US & UK companies to integrate with markets and to improve margins.

These acquisitions would give these companies an opportunity to utilise the existing brand and to improve profit margins. Benefits of these acquisitions would start accruing from 2007.

The Cotton Advisory Board has pegged India's cotton production at 27 million bales of 170 kg each during 2006-07 cotton season as against 24.4 million bales in 2005-06, an increase of around 10 percent.

Fitch is of the view that most T&C companies would have strong top-line growth in 2007.

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