Market Identification and Export Planning For Shawls,

Scarves, Mufflers, Mantillas, Veils and similar articles of

textile materials.
(HS Code: 62149050 )
Individual Assignment for Sectorial Strategy

Index
1 | Page

1.
1.1
1.2.
1.3
1.4
1.5
1.6
1.7
2.
2.1
2.2
2.3
3.
3.1
3.2
3.3
3.4
3.5

Sr. No
Content
Page Nos
Textile and Clothing Industry of India
Introduction
Current Textiles and Clothing Exports trends
Liberalised trading regime and emerging opportunities
Country-wise analysis
Textiles exports 2012-2013
Export Promotion Measures
Support to Textile and clothing Industry under union Budget
2013-2014
Selection of Shawls, Scarves, Mufflers, Ventilas, veils
and other similar material of textiles
Basis
RCA
Free to Export
Market Selection
RHI
BOT
TDI/TOI
IPI
TII

3
3
4
4
5
6
6
7
8
8
9
10
11
11
11
12
13
14

1.Textile and clothing Industry of India

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The Indian apparel industry had its origin during the Second World War
mainly for mass production of military uniforms. Over the years, its profile
has undergone significant changes. Technology has been gradually upgraded
and there is qualitative and quantitative improvement in apparel industry in
India. Now India is well known for its fine textile products and emerged as
strong destination of all types of high end textile products. Indias garments
are exported to almost all parts of developed world. Most of the leading
fashion brands are sourcing substantial quantities from India now.

1.1 Introduction
Indias textiles and clothing industry is one of the mainstays of the national
economy. It is also one of the largest contributing sectors of Indias exports
worldwide. The report of the Working Group constituted by the Planning
Commission on boosting Indias manufacturing exports during 12th Five Year
Plan (2012-17), envisages Indias exports of Textiles and Clothing at USD
64.41 billion by the end of March, 2017.
Textile and Clothing (T&C) industry is one of the key contributor in Indian
economy.
It accounts for:

14% of industrial production,

Employs 45 million people,

Accounts for approximately 12% of countrys total export basket and

Contributes 4% of GDP.

Milestones :

Exports of textiles and clothing products from India have increased

steadily over the last few years, particularly after 2004 when textiles
exports quota stood discontinued.

Indias Textiles & Clothing (T&C) exports registered a robust growth of

25% in 2005-06, recording a growth of US$ 3.5 billion over 2004-05 in
value terms thereby reaching a level of US$ 17.52 billion and the
growth continued in 2006-07 with T&C exports of US$19.15 billion
recording a increase of 9.28% over the previous year and reached USD
22.15 billion in 2007-08 denoting an increase of 15.7% but declined by
over 5% in 2008-09. Exports of Textiles & Clothing grew from USD

3 | Page

21.22 billion in 2008-09 to USD 22.41 billion in 2009-10 and has

touched USD 27.47 billion in 2010-11.

In the financial year 2011-12(P), exports of textiles and clothing, has

grown by 20.05% over the financial year 2010-11 to touch USD 33.31
billion. Textiles exports in the period 2012-13 are witnessing a (-) 4.82
percent growth in dollar terms although there is 8.10 percent growth in
rupee terms.

During the year 2012-13, Readymade Garments account for almost

39% of the total textiles exports. Apparel and cotton textiles products
together contribute nearly 74% of the total textiles exports.

1.2 Current Textiles & Clothing exports trend:

(a) Trend during the period 2011-12.

In rupee terms, during 2011-12 there has been a surge in exports of

Handloom product (68.51%), Coir & Coir Manufactures (40.49%),
Cotton Textiles (37.23%), Man-made textiles (25.99%), RMG (24.80%),
Wool & Woolen textile (20.97%) and Jute (4.72%).
In US$ terms the surge during 2011-12 registered in Handloom product
(60.09%), Coir & Coir Manufactures (33.46%), Wool & Woolen textile
(14.93%), Man-made textiles (19.69%), RMG (18.56%), Cotton Textiles
(30.37%) and Jute (-0.52).

(b) Latest Trend during the period 2012-13

The total textile exports during 2012-13 (P) were valued at Rs

172494.71 crore as against Rs 159570.55 crore during the financial
year 2011-12, registering an increase of 8.10 percent in rupee terms.
In US dollar terms, the same was valued at US$31705.53 million
(2012-13, P) as against US$33310.21 million during the corresponding
period of financial year 2011- 12 registering a decline of 4.82 percent.

1.3 Liberalised trading regime and emerging opportunities

In the liberalized post-quota period, India has emerged as a major sourcing
destination for buyers from all over the globe. As a measure of growing interest in
the Indian textiles and clothing sector, a number of reputed houses opened their
sourcing / liaison office in India. These include Marks and Spencer, Haggar Clothing,
Kellwood, Little Label, Boules Trading Company, Castle, Alster International, Quest
4 | Page

Apparel Inc., etc. Commercially the buoyant retailers across the world are looking
for options of increasing their sourcing from the Indian markets. Indian
manufacturers are also pro-actively working towards enhancing their capacities to
fulfill this increased demand.

1.4. Country-wise analysis

In the global exports of Textiles, India ranked as the third largest exporter,
trailing EU-27 and China, as per WTO data 2011 (latest). In the global
market exports of clothing, India ranked as the fifth largest exporter as per
WTO data 2011 (latest), trailing Bangladesh, Hong Kong, EU-27 and China.

The latest available data released by WTO Secretariat, the values of top ten
exporters of textiles & clothing in the world in calendar year 2012 are given below:-

5 | Page

1.5. Textiles Exports 2012-13

The targets for textiles exports for 2012-13 initially set at USD 38 billion have been
revised upwards to USD 39.60 billion, following the Foreign Trade Policy Annual
Supplement in June, 2012. The details of exports targets fixed and achieved during
the last.
Three years and current year sector and item-wise including apparel, man-made
and cotton textiles are as under:

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1.6. Export Promotion Measures

The Government has been continually supporting the textiles exports sector
through various policy initiatives to enable the sector to increase market share in
the global textiles markets. Government has introduced several export promotion
measures in the Union Budget 2012-13 as well as through schemes of Foreign Trade
Policy 2009-14, including incentives under Focus Market Scheme and Focus Product
Scheme; enhancing the coverage of Market Linked Focus Product Scheme for textile
products and extension of Market Linked Focus Product Scheme etc to increase
Indias share in various countries.
To ease the resultant financial distress, recognizing the Handloom sector as the
most vulnerable segment of the Textile industry, Government has announced a
Handloom Revival, Reform & Restructuring Package under which Rs.3884 crore
was allocated for waiver of loans of handloom cooperatives, individual weavers, etc.
and for interest subsidy, margin money and credit guarantee for fresh loans.
Government also approved a debt restructuring package to help loss making textile
mills, to be administered on a case by case basis by the banks within the prudential
norms of the Reserve Bank of India.
The recent measures taken by the Government to support the textiles exports
sector are as under:
7 | Page

(i) 2% Interest Subvention Scheme on rupee export credit is available to certain

specific export sectors. These are (i) Handicrafts, (ii) Carpets, (iii) Handloom, (iv)
Readymade Garments, (v) Processed Agriculture Products, (vi) Sports Goods and
(vii) Toys. In addition Small and Medium Enterprises (SME) in all sectors enjoy this
benefit. Currently the scheme ends on 31st March, 2013. Now this scheme of 2%
interest subvention to these specific sectors will be extended by one more year, i.e.,
up to 31st March, 2014.
ii) Introduction of a new scheme to incentivize incremental exports in certain sectors
and to certain markets (incremental export performance for the last quarter of the
year, i.e. for Jan-March 2013 as compared to exports made by the same IEC holder
in Jan-March 2012 would be eligible for such incentives); and
iii) Five new countries have been added under the Focus Market Scheme while
Eritrea has been added under the Special Focus Market Scheme. The five countries
being added under FMS are New Zealand, Cayman Islands, Latvia, Lithuania and
Bulgaria. Under FMS Duty Credit of 3 per cent is given on the FOB value of exports
while under the Duty Credit is 4 per cent.

1.7. Support to T&C industry under Union Budget 2013-14

The Highlights of Union Budget 2013-14 in respect of Textiles Sector are as under:
Technology Up gradation Fund Scheme (TUFS) to continue in 12th Plan with an
investment target of Rs. 1,51,000 crore. The major focus would be on modernisation
of the powerloom sector. It is proposed to provide Rs. 2,400 crore in 2013-14 for the
purpose. Allocation of Rs. 50 crore to Ministry of Textile to incentivise setting up
Apparel Parks within the SITPs to house apparel manufacturing units with an
additional grant of upto Rs.10 crore to each Park. A new scheme with an outlay of
Rs. 500 crore called the Integrated Processing Development Scheme has been
proposed to be implemented in the 12th Plan to address the environmental
concerns of the textile industry, including improving the effluent treatment
infrastructure. It is proposed to provide Rs. 50 crore in 2013-14 for the scheme. It
has been accepted that the handloom sector which subsumes a large proportion of
women and belongs mainly to the backward classes is in distress. It is proposed to
accept their demand for working capital and term loans at a concessional interest of
6 percent. 150,000 individual weavers and 1,800 primary cooperative societies will
benefit in 2013-14 with this inisiative. It is proposed to allocate an additional sum of
Rs.96 crore in 2013-14 to the Ministry of Textiles for interest subvention.

2.Selection of Shawls, Scarves, Mantillas, Veils

and similar articles of textile
8 | Page

2.1.Basis
The Shawls/Scarves segment has emerged as one of the leading items of export in
the Indian Man-made Fibre Made-ups category. Shawls/Scarves are the most
prominent products in the export basket of Made-ups accounting for over 21% of
the total MMF Made-ups exports during 2008-09. It is one of the fastest growing
segments and is recognised as one of the most dynamic and promising areas for the
future of Indian MMF Made-ups.

Growing exports of Shawls/Scarves

The growth in exports of these items has been tremendous during the past five
years. Indias exports, which amounted to $ 208,224 in 2008, have grown hugely by
$ 406,649 in 2012.

In US thousand
dollars
Exporters

Exported
value in
2008

Exported
value in
2009

Exported
value in
2010

Exported
value in
2011

Exporte
d value
in 2012

World

556993

667057

797696

1010776

980481

India

208224

269490

306546

383342

406649

China

128138

141473

176584

216023

220118

Italy

47627

55148

80105

119587

108898

Germany

15158

19028

28834

39834

32780

France

31045

34951

31034

32843

26651

Denmark

6740

16248

18117

21096

15140

Madagascar

1880

3998

8633

10145

14024

Spain

6534

11990

15798

16192

13567

Netherlands

5943

8197

9748

18937

13028

United Kingdom

7478

12285

13151

14969

12906

Source: Trade Map

2.2. Relative Competitive Advantage (RCA)

9 | Page

First step is to see whether India has a revealed comparative advantage in shawls,
scarves, mufflers, mantillas, veils and similar articles of textile materials. And
hence we identified the 2 digit code HS code which is 62 for the main category. Now
there were several four digit HS codes in the 2 digit sub category, we now compare
the four digit RCA, which comes out to 4.46 (greater than unity) for 6214. Below are
the details :

Products

India to World

World to World

RCA

6201

13,572

12,022,324

0.03

6202

12,512

13,688,692

0.02

6203

942,380

42,517,081

0.58

6204

2,255,945

54,061,745

1.10

6205

977,943

14,701,556

1.75

6206

1,287,118

11,574,694

2.93

6207

45,734

1,402,629

0.86

6208

148,926

2,154,316

1.82

6209

187,142

2,340,486

2.11

6210

15,067

10,769,243

0.04

6211

604,005

10,341,852

1.54

6212

85492

10245791

0.22

6213

8062

252570

0.84

6214

769730

4553612

4.46

6215

1725

976169

0.05

6216
6217

17078
57545

945628
2396965

0.48
0.63

Analyzing further, we now find the RCAs of the particular 6 digit HS code products
falling within the selected 4 digit ones. Details are as below :
Products
621410
621420
621430
621440
621490

India to World
107,036
139419
104299
12327
406649

World to World
714,415
837247
1,650,108
371336
980481

RCA
0.89
0.99
0.37
0.20
2.45

As shown above, product 621490 has the maximum RCA value of 2.45. Now lastly,
we find the product within this 6 digit HS code that shows the best growth rate,
details are as below :
Products

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2008

2009

2010

2011

2012

Growth
Rate

62149001

62149002

(0

62149010

6,676

6,943

1,489

2,134

1,721

.74)

62149011

62149012

62149013

62149014

62149019

(0

62149021

2,229

1,596

1,531

319

58

.97)

62149022

1,427

517

.00)

(1

62149023

62149024

(0

62149029

12,171

3,962

3,504

3,459

1,482

.88)

62149031

649

827

461

357

427

.34)

62149032

3,416

4,306

2,620

708

1,790

.48)

62149039

5,110

4,313

5,585

7,236

7,265

0.42

62149040

49,868

60,059

71,489

80,375

73,315

0.47

(0
(0

62149041

62149042

62149043

62149049

62149050

7,107

10,738

15,294

22,319

18,681

1.63

62149060

64,487

110,090

116,320

139,532

143,074

1.22

62149090

80,158

79,961

102,270

149,189

158,835

0.98

The stand out is 62149050 : shawls, scarves, mufflers, mantillas, veils and
similar articles of textile materials.

2.3. Free To Export

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It is extremely important to know before finalizing the product whetjer the

product is freely exportable or no. As per Indias FTP; It is found that HS62149050 is free to export.

3.Market Selection

3.1 RHI (Regional Hirschmann Index)

While deciding upon the market, one of the main question is to decide whether to
export the product to the traditional old markets or to venture into new markets.
The traditional market of India have been US and Europe. Below is the calculation
for Indias RHI index. RHI for the HS code 62 is quite high and hence it suggests that
export is concentrated in few regions. Hence we can decide to export to old
traditional markets only.

year

Reporter

Pid

2007

India

62

2006
2005
2004
2003
2002
2001
2000
1999

India
India
India
India
India
India
India
India

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62
62
62
62
62
62
62
62

Regional
Hirschmann
Index (Base 0)

product_name

Articles of apparel
accessories
Articles of apparel
accessories
Articles of apparel
accessories
Articles of apparel
accessories
Articles of apparel
accessories
Articles of apparel
accessories
Articles of apparel
accessories
Articles of apparel
accessories
Articles of apparel
accessories

and clothing
0.71
and clothing
0.7
and clothing
0.69
and clothing
0.68
and clothing
0.69
and clothing
0.67
and clothing
0.65
and clothing
0.65
and clothing
0.66

1998

India

62

1997

India

62

1996

India

62

Articles of apparel and clothing

accessories
Articles of apparel and clothing
accessories
Articles of apparel and clothing
accessories

0.67
0.66
0.66

3.2 BOT (Balance of Trade)

After deciding whether to export to traditional markets or new market, next
step is to decide in which country to export. As per 2012 data, the top 10
import countries for India to export HS code 621490 are as follows:
Sr
No

Partners
Countries

Exported
value in
2012

Imported
Value in 2012

United Arab
Emirates

6,253

32,228

U.S.A.

4,233

45,286

Germany

32,780

84,654

United Kingdom

12,906

30,699

France

26,651

60,673

Spain

13,567

29,528

Denmark

15,140

14,027

Japan

998

50,975

Italy

108,898

35,823

10

Saudi Arabia

7,292

Balance
Of
Trade
(25,
975)
(41,
053)
(51,
874)
(17,
793)
(34,
022)
(15,
961)
1,
113
(49,
977)
73,
075
(7,
292)

Status
Net Importers
Net Importers
Net Importers
Net Importers
Net Importers
Net Importers
Net Exporters
Net Importers
Net Exporters
Net Importers

What is more important is to know whether these countries are net importers
or whether they import, value add and then export. We can conclude that we
are safe exploring options of seeking trade relations with Net Importers to
boost trade. Except Denmark and Italy all other partners are Net Importers
and potentials for the selected product.

3.3. Trade Dependence/Openness Index (TDI/TOI)

It is extremely crucial to measure the openness of an economy towards the
trade of ones product as the next step. We can decide this with the help of
TDI. So we calculated the TDI Index of the top 8 net importing countries :
13 | P a g e

Sr No
1

Partners
Countries
United Arab
Emirates

U.S.A

Germany
United
Kingdom

4
5

France

Spain

Denmark

Japan

9
10

Italy
Saudi Arabia

Total
Imports

Total
Exports

175,486

210,000

2,333,805
1,173,288
689,137
663,269
325,835
93,395
885,843
487,118
131,587

1,545,565
1,416,184
481,226
556,576
285,936
105,772
798,568
501,222
364,698

GDP
360245
150940
00
357056
0
243159
0
277300
0
149100
0
314242
586715
0
219400
0
577000

TDI
107
.01
25
.70
72
.52
48
.13
43
.99
41
.03
63
.38
28
.71
45
.05
86
.01

Ranki
ngs
1
10
3
5
7
8
4
9
6
2

BOT Status
(For Selected
HS Code)
Net Importers
Net Importers
Net Importers
Net Importers
Net Importers
Net Importers
Net Exporter
Net Importers
Net Exporter
Net Importers

We exclude 2 net exporters: Denmark and Italy. From the analysis of BOT
status of the selected HS code, we can see that India is currently exporting
to countries which are already net importers of the selected product.
However, India should continue exporting to United arab Emirates, 1st
ranked in the TDI Index and follow by focusing more on United kingdoms,
France, Spain, Japan respectively 5th,7th, 8th and 9th ranked countries in the
TDI index.

3.4 Import Penetration Index (IPI)

After calculating, openness in the dependence on trade import (TDI), next
step is to find out how much of the domestic demand is satisfied by imports.
We can do this with the help of IPI:

Sr
No

Partners
Countries

United Arab
Emirates

2
3

U.S.A
Germany

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Total
Imports

Total
Exports

175,486

210,000

2,333,805
1,173,288

1,545,565
1,416,184

GDP
360245
1509400
0
3570560

IPI
Index

IPI
Rankin
gs

(695.2
5)
20.81

TDI
Ranking
s
1

9
2

10
3

119.59
4

United
Kingdom

689,137

481,226

2431590

54.64

France

663,269

556,576

2773000

42.70

Spain

325,835

285,936

1491000

37.06

Denmark

93,395

105,772

314242

81.16

Japan

885,843

798,568

5867150

21.18

Italy

487,118

501,222

2194000

40.40

Saudi Arabia

131,587

364,698

577000

163.02

10

Indias focus for export of this product should be Saudi Arabia, Germany, U.K.
and France.

3.5 Trade Intensity Index (TII)

Though the Importer may have excellent IPI values for the specific HS code,
it may not necessarily mean he will import the product from my country, so
we need to find out how important is India to the importing country for the
imports of 080132. For this we use the TII index

Partners
Countries
United Arab
Emirates

Sr No

Exported
value in
2012 of HS
code

World
Exported
value in
2012 of
HS Code

Indias Total
Export

World Total
Export

TII

Ranki
ngs

81,273

32,228

35,781,394

175,485,699

12.37

U.S.A

50,542

45,286

37,170,686

2,333,805,233

70.07

Germany

42,065

84,654

7,133,757

1,173,287,645

81.73

United Kingdom

27,227

30,699

8,100,177

689,137,011

75.45

France

24,198

60,673

5,020,327

663,268,640

52.69

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Spain

21,756

29,528

2,885,980

325,835,176

83.19

Denmark

20,024

14,027

708,078

93,395,490

188.29

Japan

15,693

50,975

6,415,550

885,843,335

42.51

Italy

15,440

35,823

4,294,288

487,118,338

48.89

Saudi Arabia

10,614

7,292

8,546,654

131,586,578

22.41

10

Germany, UK and Spain can be zeroed down as consistent best as potential

buyers with the highest TII's

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