Indian imports of textiles rose by as much as 48 per cent until November 2022 this fiscal year. Outbound shipments, however, shrank by 13 per cent.
India has traditionally been an exporter of garments and textiles. This growth in imports was driven by purchases of inputs like raw cotton, fabrics, and manmade textiles as well as of finished products.
Apparel imports shot up 53 percent in the first eight months of this fiscal. Over 40 per cent of these imports came from Bangladesh, where several Indian firms have set up units to take advantage of its duty-free access to markets like the US and the EU. Another 20 per cent of imports originated from China.
A shortage of cotton in the domestic market not just pushed up imports of the fiber but also affected the production capacity of several units in the value chain. The spurt in cotton prices, too, drove up the import value of both inputs and finished products. However this situation is expected to improve in the next fiscal once investments made under the PLI scheme start giving results, with India’s recent trade deals with the UAE and Australia as well as expected improvement in cotton production also helping.
The share of apparel and textiles among the total merchandise exports of India declined to eight per cent in December 2022 from nine per cent the previous year.