Date:25/07/2005 URL: http://www.thehindubusinessline.com/2005/07/25/stories/2005072501620300.htm

Back `India yet to exploit full potential in textile exports to US, post-MFA'

Our Bureau

New Delhi , July 24

A Federation of Indian Chamber of Commerce and Industry (FICCI) study notes that though dismantling of the Multi-Fibre Agreement (MFA) quotas has opened a window of opportunity for countries such as India and China with their low cost and diversified textile production base, India is yet to exploit its full potential.

While there existed a substantial gap in exports from India and China to the US in the top eight segments of US textiles and apparel imports during January-April 2004, the study reveals that post-MFA, this difference has further accentuated in favour of China.

For example, in `women's/girl's other outerwear' segment, the lead of $528 million which China enjoyed over India during January-April 2004 increased to $983 million during January-April 2005.

According to the study, any substantial push into the US market would require India to increase its share in the apparel and accessories segment.

The study also finds that while China's textile exports to US have zoomed post-MFA, India has just managed to cling on to its share. In the first four months post-MFA, US imports of textiles and apparel were worth $29.4 billion and represented a 10.2 per cent increase over the January-April 2004 value of $26.7 billion.

While China grabbed the opportunity and increased its exports from $4893 million to $7421 million, a growth of nearly 52 per cent, India's exports to the US registered a growth of 27 per cent rising from $1379 million to $1746 million during the same period.

Recent developments arising out of imposition of caps by the European Union and US on imports from China have resulted in a shift of attention towards suppliers from India. The Indian textile industry has already made substantial investments in capacity augmentation and technology improvements in preparation for the post-quota regime. It's the ideal time to reap the benefits arising out of MFA quota phase out and give a big push to Indian textile exports.