India’s exports of clothing and textile declined significantly last year. The reasons include the infrastructure and high transaction costs. Though India finds a place among top ten apparel exporting countries, its contribution is lower than that of countries like Vietnam and Bangladesh. These countries have tariff advantages in the form of duty-free access.

India has a tariff disadvantage ranging between one to 40 per cent in almost all top importing countries such as the US, EU, Canada, China, Australia, Switzerland, GCC countries, Israel and Chile. India’s apparel exports have shown an unencouraging trend, with a marginal de-growth of one per cent in fiscal 2018 as well as in the period April-July of fiscal 2019.

Several internal as well as external headwinds, the past year turned out to be rather challenging for India’s apparel exporters. Transition to the new taxation regime, besides posing liquidity challenges for the industry, added to uncertainties because of alternating stances on export incentives during the year. Further, a stronger rupee heightened the challenges in the international market by affecting the competitiveness of players in an intensely competitive international apparel market.