India, which has traditionally been an exporter of garments and textiles has seen an increase in imports of textiles by as much as 48.8 per cent until November this fiscal year to US $ 7.2 billion compared to the previous year.  Outbound shipments, however, shrank by 13.4 per cent to US $ 23 billion.

This growth in imports was driven by purchases of inputs like raw cotton, fabrics, man-made textiles as well as of finished products. Over 40 per cent of these imports came from Bangladesh , where several Indian firms have set up units to take advantage of its duty-free access to markets like the US and the EU. Another 20 per cent of imports originate from China.

An official source said “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.”

Official sources also believe, however, that this situation should improve in the next fiscal once investments made under PLI scheme start giving results, with India’s recent trade deals with the UAE and Australia as well as expected improvement in cotton production also helping.