After a staggering 17 per cent decline in the April–June quarter, India's textiles and clothing exports revived to witness a jump of 11 per cent in July due to favourable government policies and rupee depreciation.
Data compiled by the DGCIS under the Union Ministry of Commerce showed total textiles and apparel exports at Rs 196.36 billion ($ 2.86 billion) for July 2018, compared to Rs 176.92 billion ($2.74 billion) for the corresponding month last year. Total textiles exports witnessed a jump of 15 per cent to Rs 108.79 billion ($1.58 billion) for July 2018, versus Rs 94.29 billion ($ 1.46 billion) in the comparable month of the previous year. Moving in tandem, India's apparel exports recorded a jump of six per cent to Rs 87.57 billion ($1.27 billion) for July 2018, as against Rs 82.63 billion ($1.28 billion) for the same month last year.
The sudden surge in India's textiles and apparel exports, however, is attributed to supportive government policies, which prompted the government to expedite refund on state and goods and services tax (GST) levies on raw materials. The depreciation in the rupee against the dollar also helped Indian exporters to expedite execution of orders and receivables.
"The textiles and clothing sector in India is on the verge of turnaround. Their exports have jumped 11 per cent after a steep fall between April–July quarter. It seems the worst is over for India's textiles and clothing industry," said Sanjay Jain, chairman, Confederation of Indian Textile Industries (CITI).
The textile sector is the largest industrial employment provider in India, employing more than 100 million people directly and indirectly, and a major industry for the economic growth of the country. The overall growth in exports during April-July 2018, therefore, stood at three per cent vis-à-vis the same period last year.
Further, the man-made fibre (MMF) segment, which is expected to be the growth driver of the industry in the coming years, has seen increase in production. Growth has been observed in production of man-made fibre, spun yarn and fabric during April-June 2018.
"Refunds of state levies and GST have started coming in over the last few weeks. Apart from that, the government has given policy support to boost textile and clothing exports. Also, the rupee has depreciated below Rs 70 level against a dollar. All these factors cumulatively acted to support India's textiles and clothing exports in July. While it is early to say that the worst is over for textile and clothing exports, we expected at least seven-eight per cent growth in their exports this year," said Rahul Mehta, president, Clothing Manufacturers Association of India (CMAI).
India's textile and clothing exports, however, remained flat at $39.2 billion in 2017-18, a marginal growth of $39 billion in the previous year.
The growth of textile and clothing imports has come down significantly. While the imports of textiles and clothing have increased from $1.78 billion in April-June 2017 to $1.87 billion in the same period this year, an increase of five per cent, it is significantly lower than the growth of 16 per cent last year. The measures taken by the government to increase the import duty on various textile and apparel items will help in further reducing the imports in coming months.