Textile industries in China-India to surge ahead

Mumbai, May 6: Two of world's largest textile industries - China and India - are expected to grow around 10 and eight per cent respectively, a report says.

Various international studies have highlighted that China and India will drive global economic growth with China contributing 30 per cent to the world's economic growth in 2007 and India contributing 10 per cent.

Growth rates would be strengthened by strong domestic demand in world's two most populous nations and higher external trade.

Though China is the largest producer of cotton in the world, it is also the largest net importer in view of the fact that its cotton production is lagging behind consumption.

Large scale production of cotton during the last three cotton seasons, India has emerged as a surplus producer of cotton. Although cotton consumption in India is on the rise, there will still be a comfortable surplus.

Considerable improvement has been achieved in quality of Indian Cotton, as a result of concerted action by all stakeholders.

In the cotton season, October 2006-September 2007, India's exports of cotton are estimated at 80,000 tonnes. Of this 65 per cent will be destined for China.

China's policy for importing cotton is quite complex and cumbersome, with different types of quotas. The Chinese Ministry of Finance has issued details regarding the import taxes that will be applicable to cotton in 2007. For additional import quotas, taxes will range from six to 40 per cent.

The system of a flat minimum import price will no longer be applicable. These conditions mean that Chinese spinners pay the highest prices for cotton in the world.

With the complexity of import rate structure for cotton, there is a growing perception that it would be much better to import cotton yarn. The rate of import duty on cotton yarn for general trade is five per cent but it is zero per cent for the processing zone.

India's share in the total import of cotton yarn is not significant.

India, a vibrant and highly modernised spinning industry, because of this, India has emerged as the dominant supplier of cotton yarn in the world. There are dedicated manufacturing units in India, which have built up the reputation as reliable suppliers of fine and superfine, combed cotton yarns suitable for production of high quality home textiles and upmarket garments.

There has been a considerable improvement in weaving and processing technologies in India.

China, being the largest exporter of apparel, should explore the potential for larger import of cotton and other fabrics from India.

UNI