India’s merchandise trade deficit narrowed significantly in December, offering a glimmer of hope for the nation’s textile sector. According to data released by the commerce ministry on Wednesday, the deficit dipped to a three-month low of $21.94 billion, driven by a surge in exports, including key textile categories.
While the overall trade picture remains challenging, the textile sector demonstrated resilience, contributing significantly to the positive export figures. Readymade garments, a cornerstone of India’s textile exports, witnessed an impressive 11.6% growth during April-December 2024, a testament to the industry’s adaptability and growing global demand.
Deepali Agrawal, deputy managing director of India Exim Bank, remarked that the turnaround in the readymade garments sector was noteworthy. She added that this, along with strong performances from labour-intensive sectors such as textiles and handloom products, underscored the diversified and resilient nature of India’s export base.
The textile industry, facing headwinds from rising input costs and global economic uncertainties, has been navigating a complex landscape. However, the recent export growth signals a positive trajectory for the sector, which plays a crucial role in India’s economic growth and employment generation.
While the December figures offer a ray of optimism, challenges remain. The global trade environment continues to be impacted by geopolitical risks and inflationary pressures. The government will need to continue supporting the textile sector through initiatives that enhance competitiveness, improve infrastructure, and facilitate market access for Indian products.
Key Takeaways for the Textile Industry:
- Growth in Readymade Garments: This sector’s strong performance highlights the increasing global demand for Indian apparel.
- Resilience of Labor-Intensive Sectors: The textile industry, with its focus on skilled labour, demonstrated its ability to adapt and thrive in a challenging environment.
- Focus on Diversification: The government’s emphasis on diversifying export markets and product lines is crucial for long-term sustainability.
