Indian textile markets firming up: SIMA

The two historical reforms viz., demonetisation and GST, brought by the Government within a span of eight months, though had a big impact on the performance of the textile manufacturing sectors especially the garment exports, the Indian textiles and clothing (T&C) industry could manage the challenges and register 5.37 per cent export growth during 2017 as against the global export growth of 3.94 per cent. The Indian T&C exports has increased from $35.5 billion in 2016 to $37.4 billion in 2017. Textiles exports (yarns, fabrics and made-ups) increased by 7.82 per cent and the clothing exports (garments) increased by 2.82 per cent during the year 2017 when compared to 2016.

India could remain as the world’s second largest T&C exporter accounting 4.95 per cent global share, while China, the largest exporter accounted 34.2 per cent share during 2017 and 36.7 per cent during 2015. Countries like Germany, Vietnam, Spain and India are capturing the export space vacated by China. The increase in exports by Germany was 14.65 per cent, Vietnam was 10.67 per cent, Spain was 12.1 per cent and India was 5.37 per cent during 2017.

During the year 2017, India could sustain as the largest cotton yarn exporting country registering 25 per cent global market share and yarn export increased by 7.21 per cent during this year when compared to 2016. However, Vietnam that had 11.93 per cent global cotton yarn trade during 2015 could increase its global share to 18.13 per cent in 2017 and registered 23.93 per cent growth during this year as China has shifted its major volume of yarn imports from India to Vietnam. Vietnam cotton yarn attracts zero duty while Indian yarn attracts 3.5 per cent duty in China.

Vietnam does not produce any cotton and it imports large volume of cotton from India and exports yarn to China. The Indian spinning sector’s long pending demand of extending the MEIS benefit for cotton yarn export is yet to be considered. If considered, this would enable the Indian spinning segment to have a level playing field and utilize the surplus spinning capacity and also convert the 60 to 70 lakh bales of raw cotton being exported into value added yarn and export and thereby create new jobs for several thousands of people and increase forex earnings. Recently, the Government has extended MEIS benefits for all textiles and clothing exports beyond 30th June 2018, except cotton yarn.

P Nataraj, Chairman, The Southern India Mills’ Association (SIMA) has stated that the stability and advantage in the homegrown cotton prices during 2016-17 and 2017-18 cotton seasons have helped the industry to mitigate the challenges.

SIMA Chief has stated that cotton yarn, fabrics, made-ups and handloom product exports has increased by 18 per cent during April 2018 when compared to April 2017 with an increase of $884 million and manmade textiles has registered 4.35 per cent growth rate while there is a significant drop of 21.4 per cent in the exports of readymade garments of all textiles. He has opined that the delay in releasing the export benefits like RoSL, refund of GST accumulated credits, TUF subsidies and also the delay in announcing the enhanced duty drawback rates and RoSL have caused financial crunch for the whole value chain especially the garment sector.

Nataraj has stated that the yarn market has gained momentum in the recent times and the unsold yarn stock level is one of the lowest in the recent years. Taking advantage of increased fabric demand, the yarn prices have increased to a certain extent during mid of May 2018 when compared to the previous month. The demand for coarse and medium counts especially open end yarn both in the domestic market and export market has increased considerably and several mills have got advance booking for few months.

Nataraj has stated that early refund and clearing of Government dues would strengthen financial position of the exports and all other textile manufacturing units to revive from the financial crisis and capture the emerging market opportunities.