Indian textile markets firming up – SIMA Chairman

The two historical reforms viz., demonetization 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 & Clothing (T&C) industry could manage the challenges and register 5.37% export growth during 2017 as against the global export growth of 3.94%.  The Indian T & C exports have increased from US $ 35.5 billion in 2016 to US $ 37.4 billion in 2017.  Textile exports (yarns, fabrics and made-ups) increased by 7.82% and the clothing exports (garments) increased by 2.82% during the year 2017 when compared to 2016.

Mr.P.Nataraj, Chairman, SIMA

India could remain as the world’s second largest T&C exporter accounting 4.95% global share, while China, the largest exporter accounted 34.2% share during 2017 and 36.7% 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%, Vietnam was 10.67%, Spain was 12.1% and India was 5.37% during 2017.

During the year 2017, India could sustain as the largest cotton yarn exporting country registering 25% global market share and yarn export increased by 7.21% during this year when compared to 2016.  However, Vietnam that had 11.93% global cotton yarn trade during 2015 could increase its global share to 18.13% in 2017 and registered 23.93% 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% 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 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.

In a Press Release issued recently, Mr.P.Nataraj, Chairman, The Southern India Mills’ Association (SIMA), has stated that the stability and advantage in the home-grown 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% during April 2018 when compared to April 2017 with an increase of US $ 884 million and manmade textiles has registered 4.35% growth rate while there is a significant drop of 21.4% in the exports of readymade garments of all textiles.  He has opined that the delay in releasing export benefits like RoSL, refund of GST accumulated credits, TUF subsidies and also the delay in announcing enhanced duty drawback rates and RoSL have caused financial crunch for the whole value chain especially the garment sector.

Mr 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 recent years. Taking advantage of increased fabric demand, yarn prices have increased to a certain extent during mid of May 2018 when compared to previous month.  The demand for coarse and medium counts especially open end yarn both in domestic and export markets has increased considerably and several mills have got advance booking for few months.

Mr.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.