Textile sector seeks government support to boost exports

 The textile sector, which posted a marginal drop in exports at $40 billion in 2015-16, may see further slowdown in outbound shipments in the absence of adequate policy support, an industry body said.

“The government needs to give greater priority to the needs of the textile sector and recognise its huge potential by giving timely impetus in terms of policy support.

“Some of the issues relating to exports such as cost of funds and adverse impact of preferential access given to competing countries need to be addressed on a war footing,” Textile Export Promotion Council (Texprocil) Chairman R K Dalmia said in a statement here.

The country’s total exports of textiles and clothing in 2015-16 stood at $40 billion as against $41.4 billion in 2014-15, a decline of 3.4%.

With Vietnam’s textiles and clothing exports growing by 9.14% and that from Bangladesh rising by 4.71% last year, preferential trade agreements have been one of the major reasons for decline in India’s exports, he said.

“While Vietnam and Bangladesh are surging ahead, India seems to be caught in a ‘discriminatory tariff’ trap, thereby slowing down the momentum of exports,” Dalmia said.
India has already lost market share to Pakistan in 19 textiles and 18 clothing products during 2014 due to the preferential access extended by EU to that country under the GSP Plus Scheme.

This has happened entirely due to the duty free access given to Pakistan, while Indian exporters were paying a duty of 9.6% for made-ups and garments and 6.5-8% for fabric items, the statement said.

According to Dalmia, signing of the Indo-EU FTA at the earliest would help the textiles sector gain immensely in terms of market access.

Recognising exports as priority sector for lending and including cotton yarns in the MEIS and interest equalisation scheme are few other key issues that need to be addressed, he added.

Dalmia: While Vietnam, Bangladesh are surging ahead, India seems to be caught in a ‘discriminatory tariff’ trap, thereby slowing down the momentum of exports