Indian textile exporters are facing difficult times leading to constrained growth as well as pressures on profitability. With exports accounting for more than one-third of the Indian textile market, this is a matter of concern, notwithstanding a large domestic market.
In addition, unfavourable currency movements and high raw material prices in the past six to nine months as well as recent revision in duty drawback rates have only added to their woes, said Icra in a release on Wednesday.
Exporters have been facing subdued demand trends in the key importing countries as well as competitive pressures from nations such as Bangladesh and Vietnam over the past few years.
The pressures on textile exporters have become more severe with strengthening of Indian rupee against currencies of key competing nations during the current calendar year, which reduced competitiveness of Indian exporters vis-a-vis their counterparts.
The slowdown in apparels segment has mainly been on account of subdued demand from key textile-consuming regions of the US and European Union (EU) which account for a majority of exports from India.
This apart, cotton-yarn exports have been under pressure on account of a decline in demand from China, which used to account for more than 40% of total cotton yarn exports from India till last year and accounted for only 17% of India’s cotton yarn exports in the first four months of FY18, the release said.