Near 50% jump in imports threatens Indian Textile story

Textile and garment imports by India, traditionally a major exporter, jumped as much as 48.8% until November this fiscal from a year ago to $7.2 billion, while the outbound shipment of such products shrank 13.4% to $23.1 billion. Such imports are likely to go well past $10 billion in the current fiscal to hit a record, official and industry sources told FE.

“The imports were driven up by 2-3 factors. First, a shortage of cotton in the domestic market not just pushed up imports of the fibre but also affected the production capacity of several units in the value chain. The spurt in cotton prices, too, drove up the import value of both inputs and finished products,” said one of the sources. “More importantly, some Indian companies, which had set up units in Bangladesh, may have ramped up garment supplies to India from there,” he added.

Official sources, however, believe that the situation will improve next fiscal once early investments made under the production-linked incentive (PLI) scheme for textiles (Rs 1,536 crore until last month) start to bear fruit. India’s recent trade deals with the UAE and Australia, too, will help. Expected improvement in cotton production will also reduce imports of the basic raw material next fiscal.