Indian textile exporters are facing difficult times leading to constrained growth as well as pressures on profitability. Unfavorable currency movements and high raw material prices in the past six to nine months as well as a recent revision in duty drawback rates have only added to their woes.
Exporters have been facing subdued demand trends in the key importing countries as well as competitive pressures from nations such as Bangladesh and Vietnam over the past few years. Pressure on textile exporters have become more severe with the strengthening of the rupee against the currencies of key competing nations, which has reduced the competitiveness of Indian exporters.
The slowdown in the apparel segment has mainly been on account of subdued demand from the key textile consuming regions of the US and the European Union, which account for a majority of exports from India. This apart, cotton yarn exports have been under pressure on account of a decline in demand from China, which used to account for more than 40 per cent of total cotton yarn exports from India till last year. China accounted for only 17 per cent of India’s cotton yarn exports in the first four months of fiscal ’18.