Bangladesh and Vietnam have capitalized on China’s declining share in the last five years.
2021/8/3
Apparel manufacturing market was rattled during the global COVID-19 pandemic. Top apparel manufacturing countries like China and India have been reeling from multiple crisis in that period. While Vietnam and Bangladesh profited from their downfall.
In India’s case, the country has seen a decline in the global market for cotton yarn and readymade garments to Vietnam and China due to high costs and lack of free trade agreements (FTAs) amid fierce competition.
The share of the textile sector in total exports of Indian commodities has come down from 24% in 2001 to 11% in 2020. At the same time, the contribution of cotton yarn to the basket of Indian exports fell from 2% to about 1% and the share of readymade garments (RMG) exports fell from 11% to 4%.
In the last financial year, exports were estimated at 26% in cotton yarn and 25% in the RMG sector. This is according to a report by CRISIL Research. According to a CRISIL report, the lack of a free trade agreement (FTA) and significant improvements in peer competition are the main reasons for this dive. The textile industry accounts for 11% of India’s exports from $ 313 billion. It is the second-largest employment sector in India with 45 million direct employees and 60 million employees in the allied industries.
India is in a favorable position as China faces a global political backlash, but a consistent and coordinated effort will be needed to seize this opportunity. Indian textile pushed to the brink in 2020 as central government cuts export incentives as per WTO guidelines.
With the introduction of the Remission of Duties and Taxes on Export Products (RoDTEP) scheme, no significant improvement in incentives is expected in the report, which aims to reduce the tax burden on exporters. However, to revive the textile value chain, the government has announced additional structural reforms whose impact needs to be assessed.
In cotton yarn, India has lost market share to Vietnam and China over the past decade because of the lack of FTA amid high costs and intense competition, the report noted. India’s share of global cotton yarn exports has shrunk by 23 percent in CY 2020 from 29 percent in CY 2015, while garment shares have stagnated 3-4 percent over the past decade.
In terms of Apparel, India has done well to maintain its share of global trade in the segment as it shrinks, but competitors like Vietnam and Bangladesh have done much better. . Bangladesh and Vietnam have capitalized on China’s declining share in the last five years, while India has failed to do so. According to the World Trade Organization (WTO), Bangladesh’s share in global garment exports is 6.8 percent and Vietnam’s share is 6.2 percent. China leads with a 30.6 percent share.
Vietnam and Bangladesh enjoy low tariffs and India should look for trade agreements and low import tariffs as important export destinations. As global dynamics change, India can also take advantage of the global need to reduce its dependence on China and increase its presence in global trade, such as Vietnam and Bangladesh, by providing the right products at competitive prices. However, for this, India will have to rebuild its product portfolio, restructure incentive projects and reduce costs.
In India’s case, the country has seen a decline in the global market for cotton yarn and readymade garments to Vietnam and China due to high costs and lack of free trade agreements (FTAs) amid fierce competition.
The share of the textile sector in total exports of Indian commodities has come down from 24% in 2001 to 11% in 2020. At the same time, the contribution of cotton yarn to the basket of Indian exports fell from 2% to about 1% and the share of readymade garments (RMG) exports fell from 11% to 4%.
In the last financial year, exports were estimated at 26% in cotton yarn and 25% in the RMG sector. This is according to a report by CRISIL Research. According to a CRISIL report, the lack of a free trade agreement (FTA) and significant improvements in peer competition are the main reasons for this dive. The textile industry accounts for 11% of India’s exports from $ 313 billion. It is the second-largest employment sector in India with 45 million direct employees and 60 million employees in the allied industries.
India is in a favorable position as China faces a global political backlash, but a consistent and coordinated effort will be needed to seize this opportunity. Indian textile pushed to the brink in 2020 as central government cuts export incentives as per WTO guidelines.
With the introduction of the Remission of Duties and Taxes on Export Products (RoDTEP) scheme, no significant improvement in incentives is expected in the report, which aims to reduce the tax burden on exporters. However, to revive the textile value chain, the government has announced additional structural reforms whose impact needs to be assessed.
In cotton yarn, India has lost market share to Vietnam and China over the past decade because of the lack of FTA amid high costs and intense competition, the report noted. India’s share of global cotton yarn exports has shrunk by 23 percent in CY 2020 from 29 percent in CY 2015, while garment shares have stagnated 3-4 percent over the past decade.
In terms of Apparel, India has done well to maintain its share of global trade in the segment as it shrinks, but competitors like Vietnam and Bangladesh have done much better. . Bangladesh and Vietnam have capitalized on China’s declining share in the last five years, while India has failed to do so. According to the World Trade Organization (WTO), Bangladesh’s share in global garment exports is 6.8 percent and Vietnam’s share is 6.2 percent. China leads with a 30.6 percent share.
Vietnam and Bangladesh enjoy low tariffs and India should look for trade agreements and low import tariffs as important export destinations. As global dynamics change, India can also take advantage of the global need to reduce its dependence on China and increase its presence in global trade, such as Vietnam and Bangladesh, by providing the right products at competitive prices. However, for this, India will have to rebuild its product portfolio, restructure incentive projects and reduce costs.