31 July 2013
While the Indian cotton textile industry has increased its global competitiveness over the last decade, its exports have not shown similar results a new study shows.
According to the report compiled by Zurich-based consultancy agency Gherzi, in 2012 the Indian clothing and textile industry employed 35m people and its average wages were almost half of China's but still about double those of Bangladesh and Vietnam.
India's export competitiveness against China has improved due to 23% depreciation of the Indian rupee between 2000 and 2012, said the report.
However, India's market share in global textile and clothing trade could only increase from 3% to 4% during the period, while China managed to double its share from 17% to 35%.
The report blamed ad hoc policy interventions that harmed the overall performance of the Indian textile industry.
For instance, in 2010, a popular Technology Upgradation Fund Scheme (TUFS) was discontinued for 11 months due to lack of funds, which postponed several textile industry investment projects. And that year, the government capped cotton exports at 720,000 tonnes, harming the expanding spinning sector.
It also pointed out that the fact Indian cotton prices are now close to global norms would help sustain development of the clothing and textile sector throughout the value chain, reducing the risk of cotton price change shocks.
Entitled 'Cost Benchmarking Study - India vis-à-vis Bangladesh, Indonesia, Egypt, China, Pakistan and Turkey', it was commissioned by the Indian Cotton Textiles Export Promotion Council and released in New Delhi last week.
Source:-www.just-style.com
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