Page 8 - The Textile Magazine April 2012

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Garment exporters aggrieved
Though the Central Budget for 2012-13 has
raised excise duty on branded garments from
10 to 12 per cent, the apparel industry seems to
have hailed the Finance Minister’s proposal to
lower the incidence of duty as a percentage of
the retail price from 4.5 per cent to 3.6 per cent
with an increase effected in the abatement to 70
per cent from the existing 55 per cent. However,
what has really unnerved the industry is that the
textile package offered by the Budget has ad-
dressed only the handloom and powerloom sec-
tors and is absolutely silent on issues like credit
availability at concessional rates and its failure
to meet the major demands of garment export-
ers. There is growing concern over deceleration in growth in overall exports,
including textiles. After registering a high growth of 61 per cent in July 2011,
exports started slowing down and the growth was almost negative in Decem-
ber. Of course, the overall export performance of different sectors was most
encouraging during April-December, with the growth in cotton fabrics and
readymade garments at 13 per cent and 23 per cent respectively.
However, with persistent global economic uncertainties, it is well-nigh im-
possible to predict the fortunes of textile exporters. Tougher competition from
Asian rivals like China, Pakistan and Bangladesh would prevent India from
attaining the textile export target of $33 billion for 2012-13 against $28 billion
for 2011-12. Further, the EU and the US, which together meet almost 60 per
cent of their textile import needs from India, have started preferring products
from suppliers from the neighbouring countries. The possible loss of Western
markets would render it absolutely essential for Indian textile exporters to tap
the hitherto unexplored markets in Asia and Africa more vigorously.
Another setback to textile exporters is the latest WTO projection of a further
slowdown in world trade in 2012 to 3.7 per cent from the actual expansion of
five per cent registered in 2011. More than three years have passed since the
global trade collapse of 2008-09. Still the world economy and trade remain
fragile, and the sluggish phase of recovery has raised concerns that restric-
tive trade measures by individual countries would gradually undermine the
benefits of trade openness. Hence the need for all WTO members to revitalise
the trade system in order to strengthen the world economy. Indian exporters,
particularly of textiles, have to necessarily refashion their trade strategy in the
emerging competitive environment so as to remain afloat.
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The Textile Magazine
APRIL 2012
R. Natarajan,
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