It may be surprising, but it is a fact. The performance of the textile exporting countries including China and India to the US was dismal in 2023 (January – December) over the previous year. No recovery was in sight for China and India, major suppliers in respect of garments in the first quarter of this year (January, March 24, 2024) as per the latest US official data. The poor performance reflects the bad market conditions in the US, India’s now second largest trading partner, next only to China, as per the data for the last fiscal 2023 – 24 compared to 2022-23. Much will depend on India’s performance in the remaining three quarters of 2024-25.
The data shows that China’s apparel exports were down from dollar 3470.41 mn in January – March 2023 from dollar 3445.86 mn in January – March 2024. India’s exports declined from dollar 1332. 32 mn to dollar 1125.26 mm. Vietnam, which has more infrastructural facilities than India could show only a marginal increase in this period – from dollar 3369.12 mn to dollar 3399.74 mn.
All other countries posted an increase – Bangladesh from 1756 mn to dollar 2133.96 mn. Sri Lanka from dollar 393.09 mn to dollar 443.95mn and Pakistan from dollar 467.65 mn to dollar 502.44 mn. El Salvador and Mexico which are governed by NAFTA and Caribbean Base Initiative (CBI) upped their exports, the former from dollar 323.37 mn to dollar 414.65mn and the latter from dollar 622.81 mn to dollar 719.68 mn during the period in question.
The data shows that China’s total textiles and apparel exports fell to dollar 16362.72 mn in 2023 from dollar 21790.11 mn in 2022, those of India from dollar 5698.15 mn to dollar 4470.42 mn Vietnam from dollar 18254.76 mn to dollar 14185.30mn, and of Bangladesh from dollar 9724.97 mn to dollar 7290.07 mn.
Mexico’s exports declined from dollar 3144.82 mn to dollar 2808.47 mn, of Pakistan from dollar 2747.50 mn to dollar 2019.45 mn, Sri Lanka from dollar 2124.22mn to dollar 1609.93 mn El salvador and Nicaragua reported a fall, the former from dollar 1972.78 mn to dollar 1561.83 mn and the latter from dollar 2830.80 mn to dollar 1961.97 mn during the period under review. The data further shows that India had bettered its performance in respect of total apparel exports in 2023 over 2022 compared to China. Vietnam overtook both of these two countries by posting a good performance.
The outlook for 2024 is uncertain. Apart from global headwinds much will depend on the new government to be formed at the centre after the general elections. What will be the sort of government and whether it will take pro-active measures to shore up the country’s export performance. Total textile exports stood at dollar 34.4 bn in 2023-24, down by more than over dollar one billion against 2022-23, according to the Commerce Ministry’s latest data. Compared to between 2023-24 and 2022-23, the exports dropped by 16.3 percent with exports to the tune of dollar 41 bn in 2021-22. The segment comprising cotton yarn fabrics, made-ups and handlooms showed a significant year on year increase in exports by dollar 740 mn in 2023-24 over 2022-23 due to a surge in cotton yarn exports last fiscal.
The Tamil Nadu Government claims that the state topped the country in the export of textiles and ready-made garments. The share of Tamil Nadu is 22.58 percent of the total textiles exports from the country, quoting the recently released Import – Export Record for yearly analysis of Trade (NIRYAT) for 2022-23. Tamil Nadu is ahead of other states on the textiles export front.
According to the report, among the top 10 states that export ready-made garments, Tamil Nadu was at the top. The total value of garments exports is dollar 16.19 bn. Karnataka come second with exports valued at 4.52 bn and UP occupied the third position with dollar 2.27 bn worth of exports. Maharashtra and Gujarat lag behind.
The report notes that North America topped the total textiles exports at dollar 11 bn in 2022-23. It is followed by Europe at dollar 10 bn and West Asia and North African countries accounted for dollar 4 bn. According to the Federation of Indian Export Organisations (FIEO) Vice President, the overall Western economy has taken a hit especially in terms of recession in some parts of the globe. This has caused a drop in consumer confidence in those countries. The persisting Red Sea Crisis has escalated sea freight by about 100 percent, while our freights have gone up due to the demand for ferrying goods through air cargo. However the fall in textiles exports is being corrected since the decrease in exports between 2021-22 and 2022-23 had reduced when compared with 2023-24 he added.
The knitwear capital of India – Tirupur is feeling the pinch of it. Former President of Tirupur Exporters Association Raja Shanmugam says exports from the hub has plunged from dollar 4 bn in 2021-22 to dollar 3 bn in 2023-24. He point out that exports to the US and Europe have been affected as purchasing new value added garments has become the least priority for customers, especially those in Europe. The situation is worse than the Covid crisis which is unprecedented and unwarranted. The government should announce Emergency Credit Line Guarantee Scheme for the textile sector to prevent MSMEs from exiting its business and a moratorium for its dues for six months. Exports of readymade garments the most important item in the textile export basket, which accounts for 42 percent of the combined textile exports have decreased by 10 percent in 2023-24 over the previous year.
Secretary – General of Apparel Export Promotion Council says that, India exported dollar 14.5 bn worth of apparels in 2023-24. “The past two months have been a recovery despite global headwinds. The industry hopes that exports will touch dollar 20 bn in the current fiscal because of expectations that FTAs will be signed with the UK and EU. “The production linked Incentive Scheme for man-made apparel and fabrics and the seven Pradhan Mantri Mega Integrated Textile Region and Apparel Park (PM MITRA) will boost our production capabilities, he said, It needs no mention that the US again is an important destination for India’s Textiles and apparel exports. India is the third largest supplier of these items to the US after China and Vietnam. A study by FICCI and Wazir Advisors reveal that India’s FTA with the US and majorly improve its share in the US’s apparel imports.
