G. Srinivasan

Leading textile exporters from developing countries voiced concern over the likely impact of the post-quota regime where new forms of protectionist forces would rear their heads.

New Delhi , April 13

ALTHOUGH the country's overall exports acquitted itself well by clocking a growth rate of 12.8 per cent in dollar terms in 2003-04, exports of textiles accounting for almost one-fifth of aggregate exports continued to be modest with readymade garment exports (RMGs) notching up a moderate growth.

Unpublished figures gleaned by the Apparel Export Promotion Council (AEPC) for the fiscal show that exports of readymade garments to quota restricted countries during the fiscal year 2003-04 have amounted to 1178.6 million pieces valued at $4744.2 million.

This signifies a decline of 2.09 per cent in terms of volume, but a moderate growth of 5.71 per cent in terms of value, when compared to the same period of the previous fiscal.

Official sources told Business Line here that out of overall RMG exports as much as 55 per cent is accounted for by quota countries and the balance from the non-quota countries.

Exports to other bilateral area countries could not be taken into account due to non-availability of data.

With the existing quota regime all gearing up to end before the dawn of 2005, the country's track record of export to the quota-free areas remained mired in mystery in the face of non-availability of statistics.

Hence, the competitive ability of domestic garment industry to face the post-quota regime is but still shrouded in grey areas, trade analysts say.

In the context of the recent meeting hosted by New Delhi for the International Textiles and Clothing Bureau (ITCB), leading textile exporters from developing countries voiced concern over the likely impact of the post-quota regime where new forms of protectionist forces would rear their heads such as anti-dumping duty, anti-subsidy investigation and other stringent standards from supplier countries, the sources noted.

Already, in the fiscal 2003-04, India's exports of RMGs to the US amounted to 392 million pieces valued at $1988.1 million, representing a decrease of 7.55 per cent in terms of volume and 5.67 per cent in terms of value, when compared to 2002-03.

The council contends that the principal reasons behind this plummeting trends in India's RMG exports to the US, the single largest market, is largely due to a drastic fall of the dollar to the Indian rupee and additional duty-free imported garments to the US from the least developed countries.

A few US retail giants have begun making friendly foray into the Indian garment market to source their wares from here in the post-quota regime.

However, nothing concrete has so far emerged to induce hope that the domestic garment units would benefit from such a sourcing in the absence of policy support and other intervention measures for achieving economies of scale, sources in the industry say.

However, India's exports of readymade garments to the European Union (EU) during fiscal 2003-04 amounted to 731.3 million pieces valued at $2576.9 million, representing a modest increase of 2.67 per cent in terms of volume and a massive 18.32 per cent in terms of value.

But exports to the North American market such as Canada during 2003-04 fiscal amounted to 55.3 million pieces valued at $179.2 million, representing a decrease of 18.07 in term of volume and 11.46 per cent in terms of value, when compared to 2002-03 fiscal.

A redeeming feature in the overall performance of the garment industry is that exports of RMGs to restricted countries in the last quarter of 2003-04 (January-March) amounted to 399.1 million pieces valued at $1589.5 million.

This represents a marginal increase of 0.08 per cent in terms of volume but a relatively robust spurt of 6.80 per cent in terms of value.

This, industry analysts say, heralds hope that the momentum made during the first quarter of the current calendar year would be sustained throughout the rest of the year on the back of optimistic forecast of a modest rebound in global growth, after a prolonged period of sub-optimal growth.

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