Cotton Based Textile Exports Plunges

Cotton Based Textile Exports Plunges

Export of cotton-based readymade goods, among the highest foreign exchange earners in textile products, dropped by two per cent in 2015-16, from 37.1 billion US dollar in 2014-15 to 36.2 billion US dollar; while cotton fabrics declined a little more than four per cent.

Apparel Export Promotion Council head Ashok G Rajani said that the high price of domestic cotton, coupled with heavy duties on import of cheaper Chinese varieties, have hampered production of cotton goods.

While competing nations like Bangladesh and China have been blamed for aggressively edging out Indian exporters from the traditional markets like Europe, industry insiders identify less availability of cotton.

Though textile exports provided 13 per cent of all exports in terms of revenue earned, sectoral experts had predicted a fall in FY16 year. This was due to the rate of growth being a marginal 0.5 per cent in 2014-15, down from a significant rise of 12.4 per cent the year before.

According to domestic manufacturers, high export demand pushed up prices. Also, high dependence on export to China and the sensitivity of India’s shipments to China’s policy on a reserve cotton stock were a factor for the fall in cotton-based export.

As per estimates from the Cotton Association of India (CAI), the country is likely to produce 34.1 million bales (a bale is 170 kg) in the 2015-16 season, which ends on September 30. This is down from last year’s 38.3 mn bales. Successive droughts have reduced the supply from India, traditionally world leader in cotton production.