Export estimates released by the Ministry of Commerce.

Export estimates released by the Ministry of Commerce.

• Textile and apparel exports during April and May 2020 have declined 73.1% (in dollar terms) compared to last year.
• Cotton textile exports were 64.6 % lower. Export of man-made (MMF) yarn, fabrics, and made-ups were 71.1 % lower. Ready-made garment exports declined 78.1 %, according to the data shared by the Cotton Textiles Export Promotion Council (Texprocil).
• The export of cotton yarn has also declined steeply.

Challenges:

• Buyers in the U.S. and European Union (EU), the two major destinations for Indian cotton textiles and clothing, were canceling orders or invoking force majeure clauses within their contracts.
• Buyers are also looking at re-negotiating pre-existing orders. Buyers of cotton yarn were demanding a 15% to 20% price reduction.

Way forward:

• The government should support the industry during this critical time. The government measures should help enhance the overall competitiveness of the textile industry so that India becomes a hub for fabric and yarn production to serve the domestic and export markets.
• Textile and clothing exporters need production-linked incentives so that they are able to compete in the international market. The government should cover cotton yarn and fabrics under the scheme to reimburse State and Central levies.
• The cotton yarn could be given the 3% interest subvention benefit.
• The government should come out with measures to boost exports so that India does not lose out to competing countries.
• The government can consider relaxing trade restrictions. Textile exporters are awaiting a nod to export PPEs and MMF masks and the government can give a nod to help India utilize the export opportunities and not lose out to countries such as Bangladesh and Vietnam already had advantages in the international market.