Indian garment exports has clocked 18 per cent growth since January 2017 after having remained stagnant for past three years and we hope that similar trend may continue for remaining period this year.
India has a huge potential to capture the market space by focusing on manmade fibre (MMF) that is vacated by China in the international textile market due to declining China’s textile exports. Synthetic textiles made from MMF account for 70 per cent of world textile supply and the rest is cotton. China’s annual exports are estimated to be $150 bn. Given the scale of exports from China, even a 1 per cent shift means 10 per cent increase in India’s export.
Meanwhile, the textile industry is demanding exemption under the GST. They are claiming that fabric will become 10-12 per cent expensive, making the Indian textiles globally uncompetitive. On this, the Finance Minister Arun Jaitley has assured that the GST rates are equal or lower than the pre-GST tax incidence and the price of fabrics are not likely to go up. Further he said that nil GST on fabrics will result in zero rating of imported fabrics, while domestic fabrics will continue to bear the burden of input taxes.
The industry needs to utilise the various schemes launched by the government and should also look at entering into CIS, Africa and Far East markets to increase garment exports, apart from our traditional markets of the US and Europe. Speeding up negotiations with regard to free trade agreements (FTAs) with the EU and Canada and labour laws reforms and logistics improvement are essential for the growth of textile sector. However, there is a need to go for innovation in fabrics, integrate value chain and investment in skill development to boost exports from the country.