The Indian Textile and Apparel Industry, the largest Industrial Employer of the Indian Economy today suffers from various infirmities and thus lack export competitiveness in the international markets”, said Shri Sanjay K. Jain, Chairman, CITI.
CITI Chairman pointed out that there is a downfall in India’s position in global T&C exports (Table 1). India, which was the world’s second largest exporter of T&C products in 2014-17 after China, fell to 5th position in 2018 as Germany, Bangladesh and Vietnam stepped in. Further, India is also witnessing a substantial increase in T&C imports during the past five years (Table 2).
Table 1 – India’s Exports of Textiles & Apparels
| Table-2: India’s Exports & Imports of T&C (US$ Bn)
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CITI Chairman stated that the space vacated by China in T&C products has been largely consumed by Bangladesh, Vietnam, Pakistan and others LDCs. India, on the other hand, has not been able to capture the space vacated by China due to its competitive disadvantages and trade barriers in the international market.
Mr. Jain pointed out that the obvious reasons for lacking export competitiveness in the international markets are the high costs of raw materials and embedded State and Central taxes which are not refunded to the exporters at any stage, among others. This makes our intermediate and final products costlier. The tax calculation shows that Cotton Yarn and Fabrics attracts 6.9% and 8.2% taxes of FOB, respectively and this is where Indian products lack export competitiveness to our immediate competitors – most of them Least Developed Countries (LDCs) except China – who have the advantage of differential duties in export markets like USA, EU, China & India as well.
The month-wise export performance of Ready Made Garments and Cotton Yarn shows that there is an increase in the exports of RMG while the exports of Cotton Yarn declined significantly during the same period as shown in Table-3 and Table-4 respectively.
Table-3: Month-wise Exports Statistics of Ready Made Garments (RMG) – Value (In US$ Million)
| Month | 2018 | 2019 | % Change |
| April | 1350 | 1410 | 04.42% |
| May | 1339 | 1528 | 14.15% |
| June | 1357 | 1233 | -09.18% |
| July | 1275 | 1365 | 07.06% |
| (Apr-July) | 5320 | 5535 | 04.03% |
Source: DGCI&S
Table-4: Month-wise Exports Statistics of Cotton Yarn – Value (In US$ Million)
| Month | 2018 | 2019 | % Change |
| April | 337 | 266 | -21.00% |
| May | 349 | 241 | -30.80% |
| June | 378 | 188 | -50.10% |
| (Apr-June) | 1064 | 695 | -34.68% |
Source: DGCI&S
Mr. Jain stated that the change in trends in the exports of Ready Made Garments and Cotton Yarn is clearly due to the Scheme “Rebate of State and Central Taxes and Levies” RoSCTL announced in March 2019 for the Apparel and Made-ups. RoSCTL scheme was introduced to provide reimbursement of Central and State Taxes to make sure that taxes are not exported along with the products. However, Fibres, Yarn and Fabrics have been kept out of the same.
CITI Chairman makes an earnest appeal to the Hon’ble Prime Minister of India, Shri Narendra Modi Ji and to the Government of India to extend the benefits of currently announced RoSCTL to the entire textile value chain to help the textile Industry to boost up its export competitiveness, to achieve higher growth trajectory and generate more employment opportunities to the masses, especially youth and women workforce. Mr Jain concluded by saying, India has all the potential to become a super-power in Textile and Apparel, but it needs the support of the Government through policy reforms which can make it globally competitive and productive.
