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Govt cuts garment exports target to $45 bn

May 29, 2017
Govt cuts garment exports target to $45 bn

The Government has trimmed the textile and clothing export target to $45 billion for the current fiscal. Total shipments in the last fiscal missed the initial target of $48.5 billion by a huge margin

The target for 2017-18 will nevertheless represent a 17 per cent rise from the actual level of $38.6 billion in 2016-17, according to provisional official estimates. While garments exports witnessed a marginal rise from the year before, textiles exports dropped in the last fiscal. In 2015-16, the overall textile and garment exports were to the tune of $40 billion.

The exports were way off the target in the last fiscal, as demand from China—especially for cotton and yarn—was tepid and recovery in the developed markets like the US and the EU still remained fragile. Demonetisation, too, hit the labour-intensive sector, albeit temporarily, as many workers are paid in cash daily or weekly. Stiff competition from countries like Vietnam, Bangladesh and Pakistan—with zero-duty access to some of the key markets—added to the woes of Indian exporters. Bangladesh, for instance, exports products at zero duty to the US and the EU, which together account for around 65 per cent of Indian supplies.

For its part, the textile ministry has sought a quick resolution of the India-EU free trade agreement, which would pave the way for duty-free access of Indian textile and garment items to the EU, which account for more than a third of the country’s garment exports.