USA recently restricted textile imports from Xinjiang, China citing reasons such as the use of illegal and forced labour in the autonomous Chinese territory. This is now being seen as a huge opportunity for the Indian textile industry, according to a report of credit ranking agency ICRA.
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It’s worth mentioning here that Xinjiang is a major cotton-producing region, accounting for around 85 per cent of China’s cotton production and, since USA is leading exporting destination to the Chinese cotton and cotton products, the ban will certainly hamper the growth of this region.
As, for now, the restrictions have been put on just certain textile entities (contrary to the speculations), ICRA still believes the development goes in favour of India as India is a preferable country for cotton and textile products for US-based buyers after China due to India’s traditional richness in the segment.
“Any extension of the textile ban to a wider base in Xinjiang, China could trigger a material shift in global apparel trade in coming years,” mentioned Jayanta Roy, Group Head and Senior VP, ICRA.
The report further elaborated that China has already been facing severe challenges amidst concerns on COVID-19 origination from China and various reports worldwide have already speculated that buyers are now looking to diversify their sourcing base across countries.
In our recent coverage, we had also mentioned that there is a shift of apparel orders from China to India as confirmed by some top-rated Indian garment exporters. Here is the coverage –
https://in.apparelresources.com/business-news/manufacturing/apparel-sourcing-shifting-india-china/
Resonating the same, ICRA further said that some major Indian apparel exporters have either already started receiving increased order quantities or are in discussions with renowned international buyers, those who are eyeing India now for sourcing purpose.
“This shift is now expected to expedite, given its strong presence in the cotton-based apparels,” added ICRA’s report.
However, the report predicts that widening the ban on textile products imports could likely be inviting retaliatory actions of China amidst already ongoing US-China trade war.
