India must increase the competitiveness of textile export prices

by:JIYALI     2021-08-18
A survey report of the Federation of Indian Chambers of Commerce and Industry (FICCI) pointed out that Indian textile and apparel exports to the United States and the European Union pointed out that in the post-quota period (2005-2007), in the European Union and the United States, the price competitiveness of Indian textile exports was even not as good as some Small countries such as Vietnam and Pakistan.   The FICCI report stated that in the pre-quota period, Indian textile and clothing prices showed a downward trend, but in the post-quota period, Indian prices were firm in the EU market.   Therefore, from 1995 to 2007, India's share of EU global imports fell from 7.9% to 7.5%.  In the US market, in the post-quota period, even if the average unit price of Indian textile exports drops, the unit price in India is still higher than that in China and Pakistan. The report pointed out that India's market share has not increased significantly.   From 1995 to 2007, India’s share of the United States’ global textile and apparel imports only increased by 1.6%, while Vietnam’s share increased from 0.04% to 4.7% during the same period. China’s share increased from 11% to 33.5%. Even Bangladesh seems to be catching up with India quickly in the EU and US markets.   FICCI research further pointed out that in the US market, India is the third largest supplier of textiles and clothing. However, from a value perspective, India’s exports are only one-sixth of China’s exports, and China is the largest supplier to the US market.   At the same time, the FICCI research pointed out that in terms of quantity, Pakistan was the second largest source country of US textile and apparel imports in 2007, and India was the fourth largest source country.   Vietnam exported only US$17 million in apparel to the US in 1995, and US$4.35 billion in apparel exports to the US in 2007. In contrast, India exported US$3.2 billion to the US.  In the European Union, India was the third largest source country in 2007, with a market share of 7.5%. In the post-quota period, India’s average growth rate was higher than that of the pre-quota period, which was 15.4% in 2005-07 and 4.4% in 1996-2004.   However, FICCI pointed out that since 2005, the growth rate of India’s exports to the EU has been declining. In 2005, the growth rate of India’s exports to the EU was 18.6%, which fell to 14.9% in 2006 and 12.6% in 2007.  In the 25 EU countries, India’s market share has remained basically stable for 13 years. The average growth rate from 1996 to 2007 was lower than the growth rate of EU imports from the world over the same period.   However, the average growth rate of China, Bangladesh and Vietnam is not only higher than that of India, at the same time, it is also much higher than the average growth rate of global imports of the 25 EU countries from 1996 to 2007.   FICCI research also pointed out that in the same period, Vietnam’s share of textile and apparel imports from the 25 EU countries also increased. In 1995, Vietnam’s share was only 0.8%, and in 2007 it increased to 1.6%.   The average growth rate of Vietnam in the post-quota period (2005-07) was 25.6%, and the average growth rate in the pre-quota period (1996-2004) was 11.1%. Pakistan’s share of the EU market dropped from 3.2% in 1995 to 2.9% in 2007. Pakistan’s apparel market share (quantity) in the EU market dropped from 3.7% in 1995 to 2.7% in 2007. Among the imports from the 25 EU countries, Pakistan’s textile share (quantity) dropped from 6.5% in 1995 to 2005. Of 8.02%.   Although India’s ranking in the EU market has remained stable and ranked third, Bangladesh’s market ranking has risen from sixth in 2002 to fourth in 2007. Similarly, in the United States, Vietnam’s exports seem to be catching up with India quickly.   FICCI said that it is clear that in the EU and US markets, Indian textile exports are facing fierce competition from Asian countries such as Vietnam, Pakistan and Bangladesh.   The appreciation of the Indian rupee is part of the reason, but there are other factors that make India’s export competitiveness in global trade lower than other countries.  FICCI emphasized that among these issues, economic scale and labor law are the main factors that determine competitiveness. The government must intervene appropriately to ensure that Indian exporters increase their market share in the world textile trade.
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