National cotton textile exports are expected to grow by 9% to $9.56 billion in the current fiscal year compared to $8.42 billion last year, despite adverse market conditions in key markets of the U.S. and EU.
“Cotton textiles are among the select few items in the textile and clothing industry that have shown positive growth in exports during the current fiscal year,” said Manikam Ramaswami, chairman of Cotton Textiles Export Promotion Council, also known as Texprocil. “Current trends in exports indicate that we will surpass the target of $9 billion set for the sector, potentially reaching $9.56 billion.”
The council reports that yarn export is also estimated to grow at 8%, fabrics 9%, and home textiles 10%.
A higher goal has been set for the 2014 fiscal year, raising its expectations 20%. Ramaswami said that the industry needs to maintain its momentum to ensure that raw materials are available at international prices to Indian manufacturers.
In regards to the growth, the council reported that the textile industry seems to have fully recovered from the losses it incurred in the previous years when there was volatility in the national and international markets. The budget for 2013-14 has resulted in a push for modernization and expansion in the industry, Ramaswami explained.
In addition, according to the council, the industry is looking at expanding exports to Japan and South Korea, as they offer zero import duty, and Australia, with which India is expected to sign a Free Trade Agreement.
Texprocil has asked that Cotton Corporation of India (CCI) and NAFED to start selling their large inventory to remove the artificial shortage and restore international price parity which is important to help maintain export momentum.
According to Ramaswami, the government should ensure that Indian cotton is made available at international prices or lower. Importing cotton at higher international prices would only exacerbate the current account deficits at a time when the country needs to increase exports and reduce trade gap, he said.
Domestic cotton prices are ruling at 3 to 5% higher than international rates in spite of India having a surplus of cotton overall.