The textile and apparel sector seems to have seen a revival, going by export performance in October this year. Apparel exports grew 54 per cent in rupee terms in October compared with the same month last year; in dollar terms it was 36 per cent for the same period. Total textile and apparel exports grew 38 per cent in rupee terms and 22 per cent in dollar terms for the same period.
One big reason for this was that last year exports had dropped due to the impact of GST introduction. Rupee depreciation also seems to have encouraged exports now. Manufacture of textiles grew 5.4 per cent this September year-on-year and manufacturing of wearing apparel saw a 20.9 per cent growth for the same period. The growing, positive trend shows visible signs of recovery after a difficult period. Market sentiment was good and that demand had picked up in the US and the European Union.
However, India’s overall textile and apparel exports in H1 FY19 stood at $18.4 bn, showing a decline of 1 per cent from the previous year. During the same period, textile and clothing imports increased by 4 per cent compared to the previous year. Export of all the categories except apparel have grown in H1 FY19 as compared to H1 FY18. Apparel exports saw a decline of 16 per cent this half year, largely attributed to the decline in apparel exports to the UAE. Overall, textile and garment exports to UAE also declined by around 50 per cent during first half of FY19.
On the import front, all categories except fibre saw an increase in H1 FY19. Apparel imports increased sharply by 56 per cent, primarily due to the impact of reduced effective import duties post GST for imports from countries like China and Bangladesh. China continues to be the largest import partner for India, however, the imports declined marginally by 0.4 per cent in H1 FY19 as compared to the previous year.
Meanwhile, there will be some relief to the industry as India’s new simplified return forms for goods and services tax (GST) will be rolled out from April 1 next year. The refund process is being further streamlined to make it completely online and friendly for taxpayers.
At this occasion, I would like to wish all our readers a very Happy and Prosperous New Year 2019…