The textile and clothing sector is witnessing signs of recovery and expected to perform better in export and domestic markets this year, an industry official said.
“The sector, which saw a major hit due to demonetisation, implementation of GST, rupee appreciation, and high domestic cotton prices, is finally showing some signs of recovery,” said Sanjay K. Jain, chairman, Confederation of Indian Textile Industry
Mr. Jain, quoting the RBI Financial Stability Report — June 2018, said that the stressed advance ratio of the textile sub sector had improved in March this year compared with the levels in September last year. It was 23.7 % last September and 22.3 % in March this year.
The size of the industry is almost $120 billon. Of this, exports constituted $37 billion. “After the [implementation of GST], there was a stress in the sector for several reasons.
“Now, aggregate demand in the domestic market has improved. With dollar strengthening, exports will also increase. In April-May this year, yarn exports went up. This trend will be seen soon in fabrics and garments too,” he said.
Exports had remained flat for the last four years. The government is working on [duty] drawback rates and ROSL (refund of State levies) and announcements are expected shortly. This will also give a boost to exports this year.
Import growth
However, one issue of concern for the industry is the growth in imports.
In 2017-2018, imports of textiles and apparel touched $7 billion, which is 16% higher than the previous year. The imports are mainly yarn and fabric. In the case of garments, it is from countries with which India has a free trade agreement. The rules of origin should be specified for garment imports, he said
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