India’s apparel exports are likely to increase to 18 billion US dollar in calendar year 2015 and to 20 billion US dollar in 2016 against 16.5 billion US dollar in 2014, according to a report by investment information and credit rating agency (ICRA). The growth in India’s apparel exports will be supported by the expectations of increase in the global apparel trade and partly due to benefits of depreciated rupee.
But the report warned that “depreciated rupee is unlikely to remain as a sustainable advantage in long-term as India’s market share in world’s trade has not significantly changed despite depreciation of Indian Rupee during last three years. To achieve the market-share growth in the long-term, the structure challenges as highlighted earlier needs to be addressed.”
The report pointed out that while India is the world’s sixth largest apparel exporter after China, Bangladesh, Italy, Germany and Vietnam, its share in global apparel exports had remained modest over the last decade at 3 to 4 per cent despite India being one of the world’s largest cotton producers and manufacturers of man-made fibers with world’s second largest spinning and weaving capacity
The report said while China, Bangladesh and Vietnam were able to realize the benefits of the new trade arrangement (WTO’s agreement on textile and clothing) thereby increasing their share in global apparel trade substantially, India’s share had remained modest despite its strength in terms of availability of cotton.
“China is the largest apparel exporter on account of the highest global capacities across the textile value chain; however, the share of India had remained modest despite India being amongst the largest producer of cotton and man-made fibre and having the second largest capacity for spinning and weaving,” it said.
According to the report, fragmented nature of the weaving, processing and garmenting industries with low levels of modernization, higher cost of production, modest share of non-cotton apparel and reliance on imported machineries across the textile chain have been the key factors which had constrained growth in India’s apparel exports.