India's 2010 global textile ambition may remain a dream, says ASSOCHAM

30 Aug '05

4 min read

India's global textile exports are expected to fall down from targeted US $ 50 billion by 2010 to US$ 35 billion if the rising crude oil prices continue to upsurge over $ 80 a barrel as these will add to the already rising input costs to make its global export trade virtually uncompetitive, according a paper brought out by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

As on today, our textile exports bring us foreign exchange of little over US$ 14 billion.

Releasing a Paper on `Rising Crude Oil Prices and Its Possible Impact on India's Global Export Trade, ASSOCHAM President, Mr. Mahendra K. Sanghi said that the global crude prices are estimated to even go up over $ 80 a barrel to further propel the input cost for textile industry which is already high.

Also the transaction cost in case of textile exports which at present ranges over 10% will further go up with rising crude oil prices and put domestic textile trade into jeopardy, said Mr. Sanghi.

He pointed out that already the textile exports have witnessed a 20% decline in first 5 months of the current fiscal, the aftermath effect of which will be counter productive.

The domestic textile industry as such would require US$ 15 billion of new capital investment by 2010 to achieve the projected level of US$ 50 billion exports which now does not seem to be possible because the textile sector has not even received 1.5% of total FDI's that India attracted in the last 10 years, felt Mr. Sanghi.

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