Cotton textile industry becomes more competitive in last 10 years

 India’s competitiveness in the cotton textile sector has improved over the last decade against six competing countries including China, Bangladesh and Thailand, helping it grab a higher global market share.

The increase in competitiveness has been in areas like technology upgradation, manufacturing costs and exports, said the study titled ‘Cost benchmarking in India vis-à-vis Bangladesh, Indonesia, Egypt, China, Pakistan and Turkey’.

India’s global market share has increased to four per cent in 2012 from three per cent in 2002 due to greater competitiveness, the study commissioned by the Cotton Textiles Export Promotion Council (Texprocil), a Government-sponsored body promoting textiles exports, highlighted.

It is, however, much below China’s share of over 30 per cent.

India’s exports in 2012-13 were worth $32 billion. A more competitive Indian industry, with adequate Government support, could double exports within three years and create crores of jobs, the report said.

The factors that helped India improve its competitiveness included availability of cheap funds for technology upgradation under the TUFS scheme and export incentives handed out by the Government from time to time.
Transparent policy

Texprocil Chairman Manikam Ramaswami, while releasing the study on Thursday, said exports could grow manifold if the Government brought in a transparent and clearly spelt out policy to market the cotton procured by the Cotton Corporation of India.

The report, too, highlighted the issue.

“In the recent past, the policy inconsistency in terms of ad hoc policy interventions led to distortions in the overall performance of the textile industry,” the report said.

Interestingly, depreciation in the value of the rupee in the last 10 years against the dollar played a significant role in adding to India’s competitiveness against China as the yuan appreciated against the dollar in the same period.

India could gain significantly by improving competitiveness vis-à-vis China as its share in global trade is just four per cent against China’s 30 per cent, the report noted.

“A 10 per cent reduction in China’s market share gives India an opportunity to double its exports,” the report said, adding that if the Indian industry gains in competitiveness it could easily shift market away from China.

The study was carried out by Zurich-based consultancy agency GHERZI.

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