Is India moving towards textile value added fabric export?
It appears that India is moving towards for more textile value added fabric export than the conventional basic fibres and spun yarn, as the recent monthly export data suggest. Exports of basic textile products including all types of yarns, fibres and fabric dropped 39% in March 2020 ending the year 2019-20 with total exports down 14% at US$10.7 billion or INR74,400 crore. While total of all yarns and fibres export remained in negative territory – fabric export was outstanding, rising 16% during the year.
The share of fabric export in total basic textiles was 39% in 2019-20 up from 31% in 2017-18. Trend also suggest that fabric export demand generally peak in August-September and in March while they at trough in the last two months of the calendar year.
Among fabrics, plain cloth was distinctly the major material to have been shipped in 2019-20, while denim, shirting, suiting and saree followed at a distant. Women suits and furnishing fabrics were also among the top ten types of fabrics exported in 2019-20.
Bangladesh has been the major market for Indian fabrics over the years. In 2019-20, exports were worth US$720 million, up 34% year on year. Nearly 760 million sq mtrs of fabric was exported during the year. Its absorption of such a large volume along with those also coming from China and other suppliers explains its robust manufacturing activity which is largely driven by garment making and export. Bangladesh is also a major market for Indian spun yarns. Thus, its weaving sector is also strong enough to support garment production. It is a major importer of Indian cotton, which implies a strong spinning base. What is lacks is only domestic fibre.
With Bangladesh at the top, the other major markets for Indian fabrics are USA, Sri Lanka and UAE, with fifth position held either by Senegal or Afghanistan.
On the other hand, India has ample domestic availability of all kinds of fibres and also being the largest producer of cotton in the world. It has the major spindleage and loomage capacity in the world. However, its garment making capacity does not match upstream supply and neither those in China or with Bangladesh. Thus, India will take a long way to go up the value added product like garment, given the current poor risk taking ability and government support.
Spun yarns, filaments, manmade fibres and cotton have been seeing year on year drop since December 2018 with a brief respite only in January 2020 in this 16-month long period of negative growth. The last two months of 2019-20 suffered a major blow from China as the country imposed complete lockdown to contain coronavirus spread. All internal logistics were on a standstill while seaports and airports were shut. Thus, exports to China dwindled sharply, erasing all aspects of positive growth seen in January. India also under lockdown in the last week of March, was another blow for all outbound cargoes.
India also appear unprepared and failing to take global opportunities emerging time to time. While many trade associations and federations had voiced these opportunities but were unable to take them to any logical return. The trade war between China and US which began in July 2018 had opened up enormous opportunities for Indian textile exports, but shipment remained a begging. Now with the misery caused by coronavirus, there appears another opportunity for Indian textile industry. But how does it prepare to take on this prospect only time will tell.
