India’s textile exports dropped 13 per cent year-on-year in January following a sharp fall in cotton textile exports. Cumulative exports of textile and apparel products dropped four per cent year-on-year in April to January 2018. While cotton textile exports fell one per cent year-on-year, apparel exports dropped five per cent year-on-year.
The share of textile and apparel exports also declined from 14 to 12 per cent in January 2018 as compared to the corresponding period previous year. One of the key factors for the decline in exports is embedded duties, which are more than five per cent. The slide in exports comes at a time when there has been a rise in imports of textile products post GST. Imports of textile yarn, fabric and made-ups increased by 15 per cent year-on-year during April to January 2018.
Post-GST effective import duties have come down sharply, making imports cheaper for the domestic industry by 15 to 20 per cent. Cotton yarn exports dropped over 26 per cent between 2013-14 and 2016-17 in spite of the textile industry’s adding over three million spindles and 62,000 rotors in spinning capacity during the period under review. The industry wants export incentives for cotton yarn as it is a vulnerable sector.