The Hindu : Tamil Nadu News : Lack of vision reason for negative growth in textile sector

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Monday, Mar 08, 2010
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Tamil Nadu

Tamil Nadu

Lack of vision reason for negative growth in textile sector

R. Vimal Kumar

Tirupur: For the Indian garment exporters, who boasted their strengths till the recession struck them badly, it would be an ear sore to hear that the major competitors like Bangladesh, China and Vietnam were successful in registering growth during and post global meltdown.

“Implementation of reactive policy measures and lack of distinct vision in stimulus packages by the government were main reasons for the negative growth of Indian garment exports,” K. Rangarajan, Head (Kolkata centre), Indian Institute of Foreign Trade (IIFT), told The Hindu here on Sunday.

Dr. Rangarajan said that the last quarter comparison of garment exports in 2008 (the year when recession struck) indicated that the Indian exports had dropped from the corresponding period (ie October 1 to December 31) in 2007 by minus 5 per cent.

Exports

At the same time, exports from Bangladesh and Vietnam increased by 17.4 per cent and 10.5 per cent, respectively. (ie calendar year taken to compare textile exports).

Dr. Rangarajan explained how the competitiveness and internal strengths of Indian garment industry got exposed when confronted with the global financial slow down.

“We failed miserably to understand the ‘quality of demand' during the recession and instead went ahead with a rigid marketing strategy, which caused the negative growth,” he pointed out.

Not cheerful

The post recession scenario was also not cheerful for Indian exports.

In 2009, Bangladesh was able to export $ 2,351 million of knitwear T-shirts against $ 1,461 million by India in that segment.

“Remember, export of knit T-shirts from Bangladesh was just $ 800 million seven years ago,” Dr. Rangarajan said.

Similarly, in woven items like men's shirts too Bangladesh ($ 777 million) and China ($ 3,092) registered phenomenal growth in 2009 comfortably pushing India behind.

Dr. Rangarajan feels that stimulus package offered by the government to overcome recessional trend was more generic in nature.

“We need to address different textile segments separately and also need to take into account the externalities including the surge of countries like Thailand and Bangladesh in the global garment trade,” he opined.

He cautioned against the practice of formulating new policies to strengthen the industry when evaluation of progress of earlier policies like Textile Vision document brought out in 2005 were not done annually.

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