Under the World Trade Organization (WTO) Agreement on Textiles and Clothing, the textile quota scheme of quantitative import limitations under the multi-fiber arrangement (MFA) came to an end on 1st January, 2005, hence developing countries like India will flourish in the new competitive atmosphere and as a result, the Indian textile industry will have a stronger place in both their export and domestic markets.
All along with its usual yarn and fabrics, at PERFORMANCE FABRIC present India is exporting more than 100 garment product range. Many worlds’ leading brands like Banana Republic, Tommy Hilfiger, Gap, Liz Claibome, Polo etc, are sourcing products from India.
With huge investments, persistence innovations, latest product mix and planned marketing, today, India has come out as a flourishing outsourcing centre for textiles and apparel industry to meet the global requirement of the manufacturing fibers and yarns products. In a view of the rising rapport with major global brands, dismantling of quota system from 2005 era would hit upon India as a main global outsourcing hub.
Competitive advantage & possible growth in Synthetic Textiles Sector
India’s synthetic textile sector is relatively modern and has a high growth potential which will help India to coming out as a major outsourcing hub. With a compounded annual growth rate of more than 22% the exports of MMF textiles have stretched out to a level of US $1.62 billion in 2002-03 starting from small exports in 1954. The export growth in 2002-03 matches up to the preceding year was in the harmony of 30 percent, and the MMF textile sector is the only sector where the performance has exceeds by the target fixed for this year by US $ 115 million.
Indian synthetic textiles are more and more accomplishing new markets along with keeping the market share in the existing markets. At present Indian synthetic textile exports are targeting more than 175 countries worldwide, where Middle East accounted for over 32 percent of our exports and the share of the extremely quality conscious in European Union, approximately 23 percent.
Over the years, the Indian MMF textile sector has built-up an export base; and the share of MMF textile exports in the total Indian textile export has also been raised, the share moved up from 10.38% in 2000-01 to 11.46% in 2001-02 and more to about 14% in 2002-03.
At present Indian exports of synthetic textiles to USA are rising at more than 90% yearly. It has also been observed that export growth will be striking for major MMF textile items after dismantling of quota system from 2005.
Further more, Indonesia, Korea’s export of synthetic textiles are turning down compared to previous year. Manufacturing capacity of Korea has declined by more than 30% in the polyester filament sector in 2002 and in 2003 and it is expected to turn down further more, which will end with a turn down in their exports of polyester filament fabrics. Due to anti-dumping duty on the polyester filament fabrics obtained from Taiwan and Korea, countries like Brazil, gaining of more opportunity for India will exists as a larger synthetic fabrics exporter.
In the world, synthetic textile trade’s share of India is also seeing increasing. The export share of Indian synthetic textiles in worldwide increased from 0.11% in 1971 to 1.12% in 1991 and more to about 3% in 2002. This suggests the rising performance of Indian synthetic textile items in the worldwide market.
Still there is an opportunity to explore new market segments like Latin America and Africa all along with maintaining the share in the established markets like European Union and USA. At this stage an annual growth expected to 15% for synthetic textiles and exports are expected to touch US$ 2.5 billion in 2005-05 and US$ 4.3 billion in 2009-10.