Home textiles and apparel manufacturers are optimistic about strong demand in the global market, particularly in the US. However, because cotton and synthetic fibre are more expensive than global prices and because further correction is unlikely because of import duties and minimum support prices, the industry is concerned about its competitiveness.
The demand for clothing and home textiles is expected to increase globally. Ready-made clothing exports increased 17.3 per cent to US $ 1.1 billion in September. The Confederation of Indian Textile Industry’s secretary general, Chandrima Chatterjee, claims that October exports were also robust due to the encouraging demand in markets such as the US and the EU.
According to Crisil, the home textiles industry is expected to rise by 6–8 per cent this fiscal year due to strong US demand and local market expansion. Around 60 per cent of home textiles’ revenue comes from exports, of which 70 to 75 per cent come from the US alone. The industry is concerned about the cost of cotton and synthetic fibres, though. Over the previous month, as new cotton deliveries began, Indian spot cotton prices fell from 87 to 83 cents per pound. Kedia Commodities notes that ICE December cotton futures are still trading between 67 and 75 cents a pound.
Since cotton’s MSP rate is greater than the market rate and MSP will lessen pricing pressure, the sector does not anticipate any more corrections. “In addition to the increased MSP, the 11 per cent import duty will prevent further price reductions. As a result, our cotton and cotton-derived products will be less competitive on the global market,” said K Selvaraju, secretary general of Southern India Mills Association. At the moment, the trader sells cotton to yarn mills after adding the 11 per cent duty that is currently applied on shorter staple cotton that is less than 32 mm in length.
The cost of viscose and polyester is also lowering the competitiveness of Indian goods. Indian polyester costs 25 per cent more than Chinese polyester, and viscose costs 12–15 per cent more. Additionally, the Bureau of Indian Standards’ Quality Control Orders are making it challenging for firms to import viscose and polyester, according to Salvaraju.
