India’s textile and apparel exports to the United States, its single largest market, were up 55% in the first seven months of 2021.
This is the fastest pace of growth among the top five countries exporting textile and garments to the US.
India’s exports to the US surged 55 per cent during January-July 2021, higher than Vietnam’s 18 per cent, Bangladesh’s 29 per cent, China’s 28 per cent and Mexico’s 31 per cent.
Apparel constituted the bulk of textiles and garments imports made by the US during the initial seven months of this year, and were valued at $42.366 billion, while non-apparel imports accounted for the remaining $18.026 billion, according to the latest Major Shippers Report, released by the US department of commerce.
A sustained recovery in global trade and demand from key external markets like the US and the European Union in product categories such as textiles and garments have helped boost India’s exports, which recorded the sixth consecutive month of growth in August.
While India’s cumulative merchandise shipments have been helped by a spike in petroleum exports, the textile and garments sector has been a major product category recording a surge in value terms, alongside the gems and jewellery sector, engineering goods and cereals.
A recovery in consumer spending in the US and European markets, a noticeable shift away from China, a strong demand for home textiles, where India has an edge over its competitors – these are some of the reasons for the strong export performance
Segment-wise, among the top ten apparel suppliers to the US, imports from El Salvador, Honduras and Pakistan shot up by 75.19 per cent, 74.63 per cent and 69.14 per cent year-on-year respectively.
On the other hand, imports from Indonesia and Cambodia registered only a single-digit increase of 2.94 and 7.88 per cent compared to the same period of the previous year
Yes the market is reviving because of surge in orders from the US. The markets are seeing shoppers back and the retail index is improving. We have witnessed increase in orders and as far as categories are concerned the growth is seen across all product categories. We are seeing a revival and hopefully the business will be back on track. The impact of COVID 19 in countries like Vietnam has also pushed some business towards India.
NARENDRA GOENKA, MD, TEXPORT SYNDICATE
Less severe lockdown restrictions in the country’s export hubs, especially in southern states such as Tamil Nadu and Karnataka, during the second Covid-19 wave also ensured continuing operations of units, alongside some degree of diversion of products from the sluggish domestic market to exports.
From a macroeconomic perspective, rising exports are a positive sign for India’s economy as it recovers from the economic shock induced by the second wave of the Covid pandemic, which has differentially blunted three out of the four engines of GDP growth — private consumption, investments and government consumption.
Exports have been a silver lining, even as there are looming headwinds, including runaway freight rates and the growing shipping container shortage, alongside the possibility of global central banks putting a stop to their quantitative easing policy that could, in effect, progressively temper consumer demand in these markets.
While officials at the Ministry of Commerce and Industry have maintained that duty remission schemes such as RoDTEP (Remission of Duties and Taxes on Exported Products) and RoSCTL (Rebate of State and Central Taxes and Levies) have helped free the financial headroom available for exporters, players in the garments and textiles sector have flagged concerns over delayed operationalisation of tax rebate schemes and lower-than-expected benefits.
Challenges on the availability of containers and high shipping costs have been cited by both exporters and analysts as areas of concern in the near term.
The import of textiles and apparel by the United States increased by 29.29 per cent to $60.393 billion in the first seven months of 2021, compared to $46.712 billion in January-July 2020. With 27.74 per cent share, China was the largest supplier of textiles and clothing to the US during the seven-month period, followed by Vietnam with 14.23 per cent share.
| The Textile Index has seen a phenomenal recovery in Sales and EBITDA in Q1 FY22 and has grown over the pre-Covid levels of Q1 FY20.
· In Q1 FY22, overall sales has seen a considerable growth of 10% when compared to Q1 FY20.
· Raw Material cost and manpower cost has seen a subsequent growth of 4% and 3% when compared to Q1 FY20.
· Fibre and Yarn witnessed the highest CAGR of 69% and 26% respectively, this is largely driven by the recent increase in cotton fiber demand and due the impact of the recent ban by USA on Xinjiang, China cotton
· Share of Bangladesh in India’s exports has increased due to the rise in imports of cotton fiber and yarn.
· Filament imports witnessed the highest growth CAGR of 25% followed by others with an increase of 15%, during the same period.
· USA’s overall T&A import trade has recovered significantly over Q1 FY 21, however the imports are still behind the pre-covid level of Q1 FY20 by 1%. India’s export trade to USA has registered a growth CAGR of 10% during the same period.
|YEAR TO DATE
( January – July )
|YEAR TO DATE
( January – July )
|Change in $Mn or % ˄˅|
|World||US $33,817 Mn||US $42,367 Mn||˄ up US $8,550 Mn or 25.28%|
|China||US $7,348 Mn||US $9,137 Mn||˄ up US $1,788 Mn or 24.33%|
|Vietnam||US $6,932 Mn||US $8,070 Mn||˄ up US $1,139 Mn or 16.43%|
|Bangladesh||US $2,891 Mn||US $3,701 Mn||˄ up US $810 Mn or 28.04%
|Cambodia||US $1,534 Mn||US $1,655 Mn||˄ up US $121 Mn or 7.88%|
|India||US $1,742 Mn||US $2,318 Mn||˄ up US $577 Mn or 33.10%