India‘s textile exports experienced a setback for the second consecutive year in 2023-24, reported TOI on Friday. The decline can be attributed to geopolitical tensions casting a shadow on the global economy.
In the fiscal year 2023-24, exports amounted to $34.4 billion, marking a decline of over $1 billion (3%) compared to the previous fiscal year. Additionally, exports saw a significant drop of 16.3% compared to the fiscal year 2021-22, when the country reported exports worth $41 billion, the TOI report stated.
Within the textile sector, the segment encompassing cotton yarn, fabrics, made-ups, and handloom products witnessed a notable year-on-year increase in exports by $740 million in 2023-24 over the previous year, attributed to a surge in cotton yarn exports. According to data from the NIRYAT portal of the Union Ministry of Commerce and Industry, North America led total textile exports at $11 billion, followed by Europe at $10 billion, and West Asia and North African countries at $4 billion.
Israr Ahmed, vice president, Federation of Indian Export Organisations (FIEO) said, 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%, while air freights have gone up by up to 200% due to the demand for ferrying goods through air cargo. However, the fall in textile exports is being corrected since the decrease in exports between FY22 and FY23 has reduced when compared with FY24,” TOI quoted Ahmed as saying. In the segment of readymade garments, which accounts for 42% of combined textile exports, there was a 10% decrease in FY24 compared to the previous year.
Mithileshwar Thakur, Secretary-General of the Apparel Exports Promotion Council (AEPC), expressed optimism for a recovery, citing recent months’ improvements and anticipated benefits from FTAs signed between India, the UK, and the EU, along with government initiatives like the PLI Scheme and PM MITRA Park to boost production capabilities.
“The past two months have seen a recovery despite global headwinds. The industry is bullish that the value of (apparel) exports will reach $20 billion in the current financial year because we are hopeful of FTAs signed between India, the UK and the EU. The PLI Scheme for Man-Made Fibre apparel and fabrics and the seven PM MITRA Park will boost our production capabilities in the textile sector,” he said.
The textile hub of Tirupur, known for its knitwear, has faced a notable decline in exports from $4 billion in FY22 to $3 billion in FY24. Raja M Shanmugam, former president of the Tiruppur Exporters Association, attributed this decline to reduced demand for value-added garments in the US and Europe, emphasizing the need for government support to prevent MSMEs from exiting the sector.
“Our exports to the US and Europe has been affected as purchasing new value-added garments has become the least priority for customers particularly in Europe. The situation in Tirupur is worse than the Covid crisis, which is unprecedented and unwarranted. The government should announce the Government Emergency Credit Line Guarantee Scheme for the textile sector to prevent the MSMEs from exiting their business and moratorium for their dues for six months,” he said.
(With inputs from TOI)
