Pak, Vietnam giving tough time to Indian textiles in US, EU

New Delhi, June 20 (PTI) - Bangladesh, Pakistan and Vietnam
are giving tough competition to Indian textiles in the U.S.
and E.U. market, as volatility in rupee value and archaic
labour laws are impacting price competitiveness of India's
textile shipments, a study by Ficci said.

"India's textile export prices have not been as
competitive as those of smaller countries like Vietnam and
Pakistan and faced severe competition in the E.U. and U.S.
markets during 2005 and 2007," the study said.

While an appreciating rupee is partly to be blamed for
this lackluster performance, other disabilities like economies
of scale and labour laws are making India's exports
uncompetitive in global trade compared to shipments from other
countries, it said.

These issues require appropriate interventions to enable
Indian exporters increase their share in world textiles trade,
it added.

In the U.S. market, while India's average price for
textile exports was higher than China's and Pakistan's, its
share in U.S. global textile imports increased by a mere 1.6
percent between 1995 and 2007. Vietnam's share rose to 4.7
percent from 0.04 percent, while that of China went up to 33.5
percent from 11 percent in the same period.

India was the third largest exporter of textiles and
clothing in the U.S. market. However, in value terms its
exports were just one-sixth of China, which was the largest
supplier.

In volume terms, Pakistan was the second largest exporter
of textiles and clothing to U.S. in 2007, while India ranked
fourth. Vietnam also seems to be fast catching up with Indian
exports.

Prices of Indian textiles and clothing hardened during
2005-07 in the E.U. market. Its share in E.U's global textile
imports declined to 7.5 percent from 7.9 percent between
1995 and 2007.

There has been a declining trend in growth of India's
exports to the E.U. since 2005, when the rate declined from
18.6 percent to 12.6 percent in 2007.

"Average growth rates of China, Bangladesh and Vietnam
were not only greater than India's, but also more than EU25's
average growth rate of global imports for 1996-2007," it said.

Although, India has been able to keep its rank intact in
EU market at number three, Bangladesh has improved from sixth
position in 2002 to fourth in 2007. PTI