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The Indian Textile Journal - October 2009 Viewpoint
Will the Green Shoots Bloom?

India's textile exports are pegged at $24 billion against China's $220 billion. The continuing fall in India's export since last one year is 20%. But sadly, the growth of the domestic textile market is only 4 to 5%, in a total size of $35 billion. Here is where our Achilles heels is. The sluggish growth in domestic consumption is unable to keep pace and shore up the fall in exports. The capacity utilisation in some of the well-to-do units even has fallen to as low as 50%, leading to retrenchment. The industry gets depressed and is keen to get sops after sops from the Government to hold the profit line from sagging further.

Apparel sales are picking up, no doubt about that, prompting the industry to talk about green shoots. But the momentum to gather in a big way, the markets in the West must be back on the rails. The industry feels that this will happen only in the second quarter of next year. Optimism apart, the industry must sit down and work out new strategies to stimulate demand in the domestic market. External factors may count a lot. But only up to a limit. Besides, new markets like Japan should be tapped in a big way. A beginning was made by the Textile Minister's visit to Japan a few months ago. It is estimated that Japan, which has many ongoing joint ventures with Chinese companies, has been buying about 80% of its clothing needs from the latter. There are reports that at present Japanese buyers are worried about the cost escalation happening in China. This is the right opportunity for the Indian companies to jump into the fray and grab their share. In our domestic market of $35 billion, the organised sector's share is hardly 7%. Our distribution and infrastructure are in a shambles. The need of the hour is changes in the policy framework to speed up work on projects and proper planning. Once these are in place, our capacity to provide world-class products at affordable prices will be within easy reach.

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