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China's retreat from textiles helps india, bangladesh

China's retreat from textiles helps india, bangladesh Source:
Date: 28-02-2013
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China, a major textile producer for about two decades, is now focusing on other sectors. It is expected this would change the fortunes of other textile producers such as India and Bangladesh.
The Chinese government has told mills in that country that if they import cotton, they would have to buy twice that amount from the state agency. The government has also increased yarn import and is concentrating on manufacturing high-value items.
As a result, India, Bangladesh and Vietnam are receiving more orders. "China is slowly trying to move out of textiles and these orders are now coming to India. China may exit the textiles space in the next 15 years," said D K Nair, secretary general of the Confederation of Indian Textile Industry.
While India has managed to secure most yarn export contracts, Bangladesh accounts for most of the apparel and garments market. India has managed to capture the home textile market, as well as the cotton yarn spinning market. This could raise 2012-13 cotton yarn exports to an all-time high of 1,000 million kg. This is primarily because to reduce its spinning capacities, China has cut cotton import substantially.
"This decade is the best for the Indian textile industry, as Chinese orders are now coming to India, Indian textile players should now take advantage of this," said the chief financial officer of a Mumbai-based integrated textiles company, on condition of anonymity.
India, earlier the second-largest apparel exporter, has lost its market to Bangladesh, which has managed to capture a large pie of the US and the Euro zone markets. The cost of production in that country is about 20 per cent lower than in India, owing to cheap labour. Currently, India is the third-largest apparel exporter, after China and Bangladesh. In 2011, India's apparel exports stood at $13.4 billion, while Bangladesh's was $19 billion, according to World Trade Organisation data. According to the Apparel Export Promotion Council, India exported apparel worth $13.5 billion 2011-12.
Indian apparel exporters have been forced to focus on the domestic market. "The apparel exports market has shifted to Bangladesh in the last few years, causing Indian exporters to rely on the Indian market," said Sanjay Lalbhai, chairman and managing director of Arvind.
Turkey has also emerged as another major apparel exporter. Importing from Turkey suits European buyers, as this reduces the time of delivery, compared to buying from Asian countries. Data compiled by the ministry of commerce showed India's textile exports declined 8.2 per cent to $18,679 million in April-November last year, compared with $20,346 million in the corresponding period of the previous year. In 2011, exports of cotton yarn, fabrics and home textiles stood at $15 billion.
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