India has lost its global market share of cotton yarn and ready-made garments to Vietnam and China owing to high cost and lack of free trade agreements (FTAs) amidst intensifying competition. This is as per a report of Crisil Research.
The report further adds that Bangladesh and Vietnam have capitalised on China’s falling share in the past five fiscals, while India has not been able to.
“India is in a favourable position with China facing political backlash globally, but capitalising on this opportunity would need a continuous and concerted effort,” the report added.
India’s share in global exports of cotton yarn shrunk 600 basis points to 23 per cent in CY2020 from 29 per cent in CY2015, while apparel share has stagnated at 3-4 per cent over the past decade.
In apparel, India has done well to maintain its share even as global trade in the segment contracted, but competitors such as Vietnam and Bangladesh have done much better. In cotton yarn, India has lost market share over the past decade to Vietnam and China because of high cost and lack of FTAs amidst intensifying competition, the report noted.
Indian textiles companies were pushed to the brink in 2020 as the Government reduced export incentives in line with guidelines of the World Trade Organization, it said.
It is also pertinent to mention here that the Crisil Research does not expect any significant improvement in incentives with the launch of the Remission of Duties and Taxes on Export Products (RoDTEP) scheme, which aims to reduce the tax burden of exporting entities.