CITI expresses concern over declining CAGR in textile industry

By

Isabelle Crossley

Published
Jan 18, 2018

Although cumulative textile exports have slightly increased over the past year, the increase is nothing compared to the increase in textile imports and the industry’s declining compound annual growth rate (CAGR) is causing concern.

There has been a three percent decline in the CAGR of the textile and clothing industry when comparing December 2017 to December 2016.

Textile imports have risen in this period with an influx of textile and garment imports coming in from Bangladesh.

According to the Export Promotion Bureau of Bangladesh, garment imports from Bangladesh reached 740.4 crore rupees (approximately 111.3 million dollars) in the period from July to December last year. This is an increase of 66% compared to the figure from last year which was around 445 crore rupees (approximately 66.9 million dollars).

Many garment manufacturers feared that the higher tax rates brought in under the GST last July would decrease India’s competitiveness in clothing production compared to its neighbouring countries, especially Bangladesh.

These figures from the Export Promotion Bureau of Bangladesh suggest that these fears were well founded. The fact that imports have risen at such a high rate whilst the Indian Government has been promoting their “Make in India” campaign suggests that this is certainly a matter to address.

According to the Confederation of Indian Textile Industry (CITI), textile imports for the month of December totalled 1010 crore rupees (approximately 165.34 million dollars) in comparison to 913 crore rupees (approximately 137.24 million dollars) in December 2016, an increase of 20.48 percent.

The Chairman of CITI, Sanjay Kumar Jain, has also stated that the share of textiles and apparel exports in the All Commodity Exports (ACE) also declined by two percent last month.

Although the cumulative textile export total has risen by two percent CAGR compared to last year, the fact that imports are rising at a far higher rate is ringing alarm bells in the Indian textile and garment industry.