China far ahead in textile exports

Priya Ranjan Dash / TNN / May 21, 2005, 06:06 IST

Text Size

Small
Medium
Large

NEW DELHI: Indian textile exports don't seem to have lived up to the hype in the first three months of the quota-free world, which has come to be dominated by China's phenomenal export gains.

<div class="section0"><div class="Normal">NEW DELHI: Indian textile exports don''t seem to have lived up to the hype in the first three months of the quota-free world, which has come to be dominated by China''s phenomenal export gains. But officials and exporters are not unduly worried despite "provisional" government (DGCI&S) data showing a big fall in Indian textile and clothing exports in January-March 2005. "These are early days yet and there is other more reliable data to suggest that India is running in second place, though way behind China," an official said, quoting import data from the US and Europe, the markets that matter.Since January, India has improved its ranking among all suppliers in the US market to the third and fourth in textiles and readymade garments respectively, from seventh and eighth position. "We were never in the running for the first place," said an official. "We aim to come second and we are on track". "Exporters are flush with orders now. In fact, for some, capacity is a constraint," an Apparel Export Promotion Council (AEPC) official said. A section of trade and industry is now pinning major hopes on China coming under quota restrictions in the US and European markets and this in turn going in India''s favour. In the wake of the two rounds of quota curb announcements by the US against China this month, Assocham said India''s textile exports could increase by 50% to those two major markets. Indian exporters said China has beaten down prices in the world market by 20-30% after the abolition of the import quotas developed countries used to maintain under the three-decade-old Multi-fibre Arrangement (MFA). China has refused to revalue its currency against the dollar despite the weakness of the US greenback against major world currencies. By keeping yuan pegged artificially low to the dollar, China has made its exports cheaper. To stop the deluge of Chinese clothing and textiles in their markets, the US and the EU have initiated "safeguard" action against China seeking to impose quotas on imports. Under China''s WTO late-entry obligations, both the US and the EU are entitled to impose quotas against imports from China up to 2008. The US has already notified its decision to stymie the growth of imports of several items of clothing from China.</div> </div>

End of Article