India textile export faces severe competition: Study

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New Delhi, Jun 19 (UNI) The country's textile exports is facing severe competition from smaller Asian countries like Vietnam, Pakistan and Bangladesh on price uncompetitive, says a FICCI study.

The study on 'India's Textiles and Clothing Exports in US and EU' noted that India's share in EU's textile imports from the world declined from 7.9 per cent to 7.5 per cent between 1995 and 2007.

India's growth rate of exports to EU was 18.6 per cent in 2005, which declined to 14.9 per cent in 2006 and further slipped down to 12.6 per cent in 2007, study noted.

India, the third largest supplier to the EU25, could achieve a constant share for the last 13 years and its average growth rate (1996-2007) has been lower than the EU's imports from the world for the same period.

However, average growth rates of China, Bangladesh and Vietnam were not only greater than India, but also greater than the EU25's average growth rate of global imports for the period 1996-2007.

The study observed that Vietnam's share in EU25's imports of textile and clothing has increased from 0.8 per cent in 1995 to 1.6 per cent in 2007.

Although, India has only been able to keep its rank intact in EU market at number three, Bangladesh has improved from sixth position in 2002 to fourth in 2007.

In the US market too, even though India's average price for textile exports declined in the post-quota period they were still higher than the China's and Pakistan's prices, FICCI said.

India's share in the US global imports of textiles and clothing increased by merely 1.6 per cent between 1995-2007, whereas that of Vietnam increased from 0.04 per cent to 4.7 per cent.

Chinese share in the US market improved from 11 per cent to 33.5 per cent in the same period. While Bangladesh seems to be catching-up fast in both EU and the US market as compared to Indian prices.

''It is evident that India is facing a severe competition from Asian nations like Vietnam, Pakistan and Bangladesh in its textile exports to the US and EU markets,'' the chamber said.

While appreciating rupee is to be partly blamed for this performance of India's exports of textiles, but there are other factors and disabilities that are making exports uncompetitive compared to other countries in global trade, it added.

''Issues like economies of scale and labour laws are key factors and determinants of competitiveness and require appropriate interventions in order to enable Indian exporters to increase this share in world textiles trade,'' FICCI emphasised.

UNI MP SBA BST1944

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