Textile exporters feel the heat of rising competition, costs

Textile exporters feel the heat of rising competition, costs
The Economic Time
Ranjit Shinde, ET Bureau Oct 3, 2011


India, once considered the leader in textile exports to the US, is now lagging behind Bangladesh, China and Vietnam, reveals the data from US Department of Commerce, Office of Textiles and Apparel (OTEXA). In fact, the country has lost a bigger share of the textile export market pie to Vietnam over the past three years.

Indian textile exporters are increasingly finding it difficult to match lower prices offered by Southeast Asian companies because of relatively higher labour and operating costs. The competition is more intense in the garment segment, which accounts for three-fourth of the total textile exports to the US. The garment segment offers better realisations compared to total textile exports.

According to the data, players in the other regions charge 11-22% lesser per square metre equivalent (SME) of apparels to US buyers when compared with Indian billing rates. For instance, in the first seven months of this year, India earned $3.6 per SME from garment exports to the US. This compares with $2.8 per SME for Bangladesh, $3 per SME for China, and $3.2 for Vietnam.