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Indian cotton textile exports decline

India’s exports of cotton textiles during April to August 2015 declined by 2.16 per cent compared to the same period last year. The declining trend may continue in financial year 2016 due to subdued Chinese demand and the sluggish European economy.

India’s over-dependence on China, especially for cotton and cotton yarn exports, is magnifying the overall decline in exports as China slows down. Further, the high cost of export finance in India of around 10 per cent, compared with three to four per cent in competing countries like Vietnam, Bangladesh and Pakistan, is also having an impact on the country’s competitiveness.

The industry has made representations to the government like interest rate subvention and re-calibration of the product-market matrix to include exports to emerging markets so that linkages can be strengthened with the value chains in these markets.

If China and Turkey were persuaded to reduce duties on Indian textile products, it would help. Measures that have been taken to support the industry include an increase in the allocation of funds from Rs 18,000 crores to Rs 21,000 crores under the export incentive scheme; a reduction in the repo rate; setting up of textile parks; and a relaxation of coastal shipping.

 
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