Indian rayon textiles export hit

Unlike many other industries and export sectors, India’s man-made fiber textile industry has remained relatively resilient during the recent global economic crisis. However, recent performance has been disappointing, according to Shri Vinod K. Ladia, the newly elected president of the Export Promotion Association of Synthetic and Rayon Textiles. In the fiscal year 2009-10, exports of man-made fiber textiles saw a modest increase of nearly 7%, reaching Rs 16,861 crore (US$3.534 billion) from Rs 15,767 crore (US$3.426 billion) in 2008-09. But this positive trend did not last. The sector has since faced its worst crisis in history, with exports declining sharply in early 2010-11. During April-June 2010-11, exports fell by 1% to Rs 3,852 crore, compared to Rs 3,898 crore in the same period the previous year. The situation worsened in the second quarter of 2010-11, with exports dropping by approximately 20% to Rs 3,464 crore, down from Rs 4,910 crore in the same quarter the prior year. The decline in exports can be attributed to several factors. On the international front, demand from key open markets such as the UAE and Saudi Arabia has dropped significantly. Even emerging markets like Pakistan and Afghanistan, which were expected to grow, have shown negative growth. Globally, slow economic recovery in the US and Europe, along with rising competition from China, has further hurt India’s position. Domestically, the situation is no better. Prices of raw materials, including fibers and yarns, have surged unexpectedly, putting immense pressure on manufacturers. Additionally, a sharp reduction in tax rebate rates and a stronger rupee against the US dollar have made exports less competitive. With these challenges, it now seems unlikely that India will meet the government’s target of $3.7 billion in man-made fiber textile exports for 2010-11. Moreover, the ambitious goal of reaching $7 billion by 2014 is also under threat. Petrochemical prices continue to rise, with polyester staple fiber prices increasing daily. Polyester yarn prices have jumped by 40% since October. Faced with these difficulties, the Export Promotion Association of Synthetic and Rayon Textiles has called on the government to take immediate action. They are urging intervention to stabilize fiber and yarn prices, ensure access to raw materials at international levels, and restore the export tax rebate rate to support the sector. Without such measures, the future of India’s man-made fiber textile industry remains uncertain.