According to a report by investment information and credit rating agency ICRA, India’s apparel exports are likely to increase to $18 billion in calendar year 2015 and to $20 billion 2016 against $16.5 billion in 2014. The growth in India’s apparel exports will be supported by its expectations of increase in the global apparel trade and partly due to benefits of depreciated rupee.
However, warning sign in the report say 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. As per the report, China, Bangladesh, Italy, Germany, Vietnam and India will the top six apparel exporting countries.
Over the last decade, India’s share in global apparel exports has remained modest at 3 to 4 per cent despite being one of the world’s largest cotton producer and manufacturer of man-made fibres with world’s second largest spinning and weaving capacity. China, Bangladesh and Vietnam are able to realize the benefits of the new trade arrangement (WTO’s agreement on textile and clothing) and hence increasing their share in global apparel trade substantially.
According to the report, fragmented nature of the weaving, processing and garmenting industries with low levels of modernisation, 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. Domestic apparel industry expected to maintain the growth rate witnessed in the past, driven by steady consumption demand growth. Apparel trade globally is expected to maintain the momentum in 2015 and 2016. However, apparel exports in India will increase along with global apparel trade, it said.
www.icra.in
