News: ‘India a potential threat to China in textiles’

(BL 29/06/2006) New Delhi - Indian textile industry has the potential to take on competition from China, whose exports of textiles and clothing have surged after dismantling of quota system in early 2005.

According to United Nations 2006 Human Development Report for Asia-Pacific, most studies have concluded that India would benefit from lifting of quotas, and some consider that India alone has the ability to compete with China, whose potential revenue gains have been put at $2 billion per annum.

India seems to have gained in both textiles and clothing. Between 2004 and 2005, exports to both the EU and US jumped by 22 per cent in value and over 11 per cent in volume.

In 1990, textile's share to India's total export was 2.1 per cent and clothing was pegged at 2.3 per cent, while in the year 2004, a year before MFA regime, textile export improved to 4 per cent and clothing contributed 2.8 per cent of global trade.

The total global textile and clothing export was pegged at $453 billion and India earned $13.5 billion out of its shipment.

The UNDP report noted large producers such as China and India emerged major gainers with quota regime coming to an end.