Chennai: Despite being a fairly large player in the apparel trade, India’s imports of apparels grew more than 30 per cent in FY19 while the exports continued to decline. Duty free imports from Bangladesh have been worrying the industry.
Apparel exports by the country were down 3.42 per cent in FY19. However, as per the data available for the 11-month period till February 2019, apparel imports were 32 per cent higher compared to the previous fiscal. Between April and February, the country imported $1,019 million worth apparels against $773 million in FY18. Once March data comes in, the imports are likely to further go up.
“Bangladesh is mainly responsible for the increase in imports. Under the free trade agreement with Bangladesh, the country has been increasingly exporting to India. More worrying is the fact that our textile production is coming down while apparel imports are going up. This is affecting the entire value chain. Bangladesh is buying fabric from China to make apparels and sending it to India,’ said Chandrima Chatterjee, Adviser, Apparel Export Promotion Council.
Despite being a neighbour, time factor is a main impediment in the fabric trade between India and Bangladesh. “It takes almost a month for Indian fabric to travel by land from Surat to Bangladesh apparel units as it gets struck at the border for around 15 days, waiting for clearance. The Chinese goods, on the other hand, reach faster through the sea route. We have asked the ministry to do something about this logistics issue,” said Sanjay Jain, Chairman, Confederation of Indian Textile Industry.
Further, Chinese fabric is competitive in terms of cost compared to Indian fabric. In fiscal 2017-18, garment exports to India more than doubled to $278.68 million and between July and December 2018 it was up 143 per cent and had already touched $270 million. Bangladesh Commerce ministry had reportedly expressed its confidence to export $2 billion worth of apparel to India in the next two years on the back of duty-free access market and rising demand for garment items at competitive prices.