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Thursday, February 28, 2008

Textile sector fails to gain from quota removal

I bet many reader still remember India's tout about India would pass China in textile industry. But the fact hits back again. This following is the news from The Times of India. . More information can be found on that website.

The dismantling of the quota system failed to work wonders for textile and clothing (T&C) exports from India while neighbouring China marched ahead, despite restricitve quotas imposed by major importers like the US and EU.

Quota system was dismantled in 2005 and India was counted among key beneficiaries. However, the survey clearly shows that China beat India in major markets like the US and EU, leaving much to be desired.

"Though the growth in our T&C exports to the world accelerated sharply to 30% in 2005, it reverted back to the trend levels in 2006 with a disappointing 10.5%. China, in contrast, continued to raise its already high share of global T&C exports, with growth accelerating from 21% in 2005 to 25% in 2006, despite restrictive quotas by the US and EU," the survey said.

India's share in the global T&C exports grew by just 0.7% to 3.7% between 2004 and 2006 just when China managed to increase its share by a big 6.3% to 27.2%.

The worrying trend continued for India in 2007 as well, if one looks at the US market. In January-November 2007, US imports of T&C from the world grew by only 3.8%, affecting imports from India that grew by only 2% though China again managed a robust 20.5% growth.

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