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Export scenario still grim
It is distressing to note that the Indian tex-
tile industry hasn’t reaped the full benefits of
the sustained fall in rupee against the dollar
that gave India a distinct advantage over its
Asian rivals in terms of export competitive-
ness. Termed “the worst performing cur-
rency in Asia”, the rupee declined by over
13 per cent against the US currency during
July-December 2011. However, this has not
manifested itself in higher sales. Not that In-
dia’s competitors in Asia fared better. Bar-
ring China, all others in the region are also
passing through a critical phase, with their
exports dwindling, but not definitely to the
extent that India suffered. The general slump in exports is traceable to the
US and Western retailers drastically reducing orders over fears of shrink-
age in demand in the coming months. This is also due to the Western buy-
ers preferring products from suppliers in close proximity to the EU and
the US, which together account for more than 60 per cent of India’s textile
exports.
It is in this backdrop, with individual economies across the world fac-
ing an unprecedented slowdown, that the Textile Ministry has so far not
been able to formulate a special policy to meet the export challenges faced
by Indian exporters. This, after the formation of six high-level commit-
tees with representatives from different ministries and departments to work
out an appropriate strategy to tackle the crisis facing the largest exchange
earner for the country. Obviously it is not possible to realise the textile ex-
port target of $33 billion fixed for 2012-13 against $28 billion for 2011-12,
given the stiffer competition from China, Pakistan and Bangladesh.
Meanwhile, what has come as a big surprise to thousands of textile com-
panies in the country is the outright rejection by the Government and RBI of
the proposal for restructuring textile loans, thereby enhancing the refinanc-
ing risks involved. This would be a further blow to the mills with higher
working capital debt and falling revenue. Higher inventories, coupled with
liquidity pressures, have forced the mills to put off buying of cotton and
other raw materials till the situation returns to normal. The only redeeming
feature in an otherwise grave situation is a low-cost interest regime likely
to be ushered in by the forthcoming Union Budget. Lower interest rates
with infusion of higher liquidity into the system would benefit all industry
sectors, including textiles.
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The Textile Magazine
February 2012
nd
Anniversary
ed i t i on
R. Natarajan,
Managing Editor & Publisher
Publishers
Gopali & Co.,
Quanta Zen Building, No.38, Thomas Road,
2nd Street, Off. South Boag Road, T.Nagar,
Chennai-600017. Ph.: 24330979, 42024951.
Fax: 044-24332413
Email: textile_magazine@rediffmail.com
textile.magazine@gmail.com
Website: www.indiantextilemagazine.com
Founder
M. Rajagopalan
Mentor
Rajagopalan Kalidasan
Managing Editor & Publisher
R. Natarajan (Mobile: 9381062161
(R) 24343475)
Assistant Editor
K.N. Ananthanarayanan (Mobile: 9003053132)
Executive Editor & General Manager
K. Gopalakrishnan (Mobile: 9840897542)
Editorial Correspondent
N. Balasubramanian (Mobile: 9840597082)
Email: balanatarajan.gopali@gmail.com
Marketing
G. Mohan
N. Ananthan
Designer
E. Marimuthu
Mumbai
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Cell: 9323711291.
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Bangalore
J. Saravanam
BS 23, 2nd Floor, Block ‘B’ Ittina Neela,
Nr. Gold Coins Club, Andapura,
Electronics City P.O.,
Bangalore - 560 100. Cell: 9880974765
Email: saravanam_j@yahoo.co.in
Member
INS / AINEC / IFSMAN
Edited & Published by R. Natarajan on behalf
of Gopali & Co., Quanta Zen Building,
No.38, Thomas Road, 2nd Street, T.Nagar,
Chennai-17, and Printed by B. Ashok Kumar
at Rathna Offset Printers, 40, Peters Road,
Royapettah, Chennai-14
The views presented herein are those of the authors. They
are not necessarily the views of the editor.
All rights reserved. Neither this publication nor any part
of it may be reproduced in any form or by any means, nor
may it be printed, photocopied or stored on microfilm with-
out the written permission of the publisher.
TEXTILE MAGAZINE
THE