As per a new Crisil Research report, lack of FTAs and increased competition led to 23 per cent decline in India's share in global exports of cotton yarn in calendar year 2020 (CY2020) from 29 per cent in CY2015. Meanwhile, India’s share in readymade garments (RMG) stagnated at 3-4 per cent over the past decade. In cotton yarn, India lost market share over the past decade to Vietnam and China while it maintained its share in RMG even as global trade in the segment contracted.

The reduction in export incentives pushed Indian textiles players further to the brink in 2020. Crisil Research does not expect any significant improvement in incentives with the launch of the Remission of Duties and Taxes on Export Products (RoDTEP) scheme. However, the recently announced PLI scheme for man-made fibres (MMF) and technical textiles is expected to improve the potential of MMF-based RMG exports where India's share has been weak. The scheme may help the sector enhance its export share over the medium to long term.