India’s textile export declined in 2016 for a consecutive year, due to weak global demand and the country’s
competitiveness getting blunt. Data from the Ministry of Textiles shows a five per cent fall to $34.9 billion (Rs 2.3 lakh crore) for 2016, from $36.7 bn in 2015.
In September 2016, the Central Government announced a Rs6,000-crore package to boost textile export. This was
on recommendations from the industry, and a commitment from it to raise annual export to $50 bn and create
100,000 new jobs.
Textile demand has remained sluggish, following uncertainty in global economy. And, India has been losing its
competitiveness to China, due to almost flat (rise in) cost of production there and depreciation in their
currency. In contrast, the cost of production had increased sharply in India over the past year.
The year 2016 has seen a 25-30 per cent jump in apparel production’s labour cost. Since labour is a major
component of the overall cost, this rose proportionately. And, while the Chinese yuan weakened by nine per cent
over the year, the rupee rose against the dollar by five per cent. India’s textiles and apparel exports are
estimated to remain flat in 2017, as the benefits offered by the government are negated by a sharp increase in
the cost of production and appreciation in the rupee.