Rating agency ICRA recently said US restrictions on certain textile imports from China’s Xinjiang Autonomous Region is likely to prove beneficial for Indian textile exporters, many of which have either already started receiving increased orders or are in active discussions with large global buyers looking at increasing their sourcing from India.
“The shift, which was previously expected to take place gradually over the medium term, could be expedited because of this development”, said ICRA senior vice president and group head Jayanta Roy.
“With China being the leading apparel exporter, accounting for more than 35 per cent of the global trade and more than three-fourths of China’s cotton originating from the Xinjiang region, any extension of the ban to a wider base in China could trigger a material shift in global apparel trade in coming years, he added.
On September 14, the United States imposed restrictions on the import of certain products originating from Xinjiang, citing concerns on illegal and inhumane forced labour in the region.
While there were speculations of a more broad-based ban on the products originating from the region, the restrictions have been limited to a few entities, for now, ICRA said. Xinjiang is a major cotton-producing belt, which accounts for an estimated 80-85 per cent of China’s cotton output.
“While over the past few years, Vietnam and Bangladesh have been the key beneficiaries for a shift away from China, India also stands to gain from any such market opportunity which may arise, given its strong presence in the cotton-based apparels,” Roy said.
