Textile companies facing reduction in overseas orders
Textiles Export Promotion Council/bodies have been reporting substantial slow down in demand from overseas markets especially from Europe and the US. Subsequently, the domestic industry sources also have been reporting production cuts and capacity under utilization.
The exporters to the US have been reporting about payment defaults. There are also instances where the overseas buyers have been asking for price reduction and have delayed payments.
The exports of textiles and clothing products from India have increased steadily during the last five years from US$ 13.5 billion in 2003-04 to US$ 22.13 billion in 2007-08 – US$ 13.5 billion in 2003-04, US$ 14.03 billion in 2004-05, US$ 17.08 billion in 2005-06, US$ 19.15 billion in 2006-07 and US$ 22.13 billion in 2007-08. However, due to economic slowdown, exports of textiles and clothing may fall short of the target during the current year. USA, which is India’s single largest market for textiles & clothing products, and many other major buyer countries have been facing economic slow down leading to adverse impact on India’s exports.
The likely shortfall in achieving the target is attributable to general decrease in the volume of imports of textiles & clothing by the major buyer countries and erosion of competitive edge of the exporters in the global markets due to high domestic transaction costs and incidences of multiple duties and taxes. The Government has recently announced relief packages for exporters to counter the slow down in exports following the global financial crises, which include reduction in interest rates on export finance, increased fund allocation for textiles etc.
Source: Ministry of Textiles