Textiles

Last Updated: July 2011 The textiles industry in India enjoys a distinctive position due to the pivotal role it plays by way of contribution to industrial output, employment generation (second largest after agriculture) and export earnings of the country. The industry is rich and varied, embracing the hand-spun and hand-woven sector at one end and the capital intensive, sophisticated mill sector at the other. Its association with the ancient culture and tradition of the country lends it a unique advantage in comparison with textiles industry of other countries, thus giving it an uncommon edge to cater to a vast variety of products and market segments both domestically, as well as, globally. The industry currently contributes about 14 per cent to industrial production, 4 per cent to GDP, and 17 per cent to the countrys export earnings, according to the Annual Report 2010-11 of the Ministry of Textiles. The industry accounts for nearly 12 per cent share of the country's total exports basket. It provides direct employment to more than 35 million people. Industry sub-sectors The textile industry comprises the following:
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Organised Cotton/Man-Made Fibre Textiles Mill Industry Man-Made Fibre / Filament Yarn Industry Wool and Woollen Textiles Industry Sericulture and Silk Textiles Industry Handlooms, Handicrafts, the Jute and Jute Textiles Industry Textiles Exports

Market size The Vision Statement for the textiles industry for the 11th Five Year Plan (2007-12) sees India securing a 7 per cent share in the global textiles trade by 2012. At current prices, the Indian textiles industry is valued at US$ 55 billion, 64 per cent of which caters to domestic demand. The export of textiles and clothing (T&C) aggregated to US$ 22.42 billion in 2009-10. The Government fixed the target for 2010-11 at US$ 25.48 billion. So far during the period AprilSeptember 2010, exports of T&C have been achieved at US$ 11.26 billion. Production During February 2011, total cloth production rose by 5.8 per cent year-on-year (y-o-y). During April- February 2011 cloth production increased by 4.5 per cent y-o-y. Export Total textile exports during April-December 2010 registered an increase of 16.54 per cent in rupee terms at Rs 87,582.83 crore as against Rs 75,149.98 crore during the corresponding period of the previous year, according to the latest data released by DGCI&S, Kolkata. The same were valued at US$ 19,217.12 million as against US$ 15,695.07 million during the corresponding period of the previous year, registering an increase of 22.44 per cent. The share of textile exports in total exports was 11.29 per cent during April-December 2010 as against 12.34 per cent during April- December 2009.

Technical Textile Segment The technical textiles segment is expected to grow by 11 per cent per annum till 2012-13 and is likely to grow at 6-8 per cent per annum till 2020 without any policy interventions. If the government intervenes by way of regulatory push, the growth of technical textiles industry can be estimated at 12-15 per cent per annum till 2020, according to Rita Menon, Secretary, Union Ministry of Textiles. She added that the technical textiles segment in India has the potential to attract investment and create additional employment opportunities in coming years. She further said that investments of US$ 1.1 billion are expected by 2012 and employment is expected to increase to 1.2 million by 2012. Textiles Last Updated: July 2011 Government Initiatives
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Technology Upgradation Fund Scheme (TUFS) - The Government has restructured the TUFS, the flagship scheme of Ministry of Textiles for upgradation of technology in the textile and jute sectors. The ministry has issued the Government Resolution on Restructured TUFS for the period 28.04.2011 to 31.03.2012 (both the days inclusive) with an overall subsidy cap of Rs 1,972 crore (US$ 0.43 billion) during the period. The objective of the present Scheme is to leverage investments in technology upgradation in the Textiles and Jute Industry, with a special emphasis on balanced development across the value chain The Scheme for Integrated Textile Park (SITP) - The scheme was approved in July 2005 to facilitate setting up of textiles parks with world class infrastructure facilities. Forty pa rks have been sanctioned till December 31, 2010 in nine states. The estimated project cost (for common infrastructure and common facilities) is Rs. 4,193.65 Crore (US$ 0.93 billion), of which Government of India assistance would be Rs. 1,419.69 Crore (US$ 0.31 billion). The projected investment in these parks is Rs. 19,456.90 Crore (US$ 4.32 billion) and estimated annual production is Rs 33,568.50 Crore (US$ 7.45 billion) Integrated Skill Development Scheme - The Government launched the Integrated Skill Development Scheme for the T&C Sector, including Jute & Handicrafts, in September 2010. The main objective of the scheme is to address the trained manpower needs of textiles and related segments. The Scheme would target to train approximately 2,56,000 persons during 2010-11 and 2011-12 The government has initiated a number of steps to ensure raw materials security for the textiles industry. In order to balance the interests of all stake holders across the value chain. A multipronged approach was adopted which included capping of cotton exports at 55 lac bales for cotton season 2010 11; and permitting yarn exports of 720 million kgs for the year 2010-11 Fiscal incentives are provided for exports of T&C items under various provisions of the Foreign Trade Policy 2009-14 The textile industry is also being supported with an extensive skill development programme to train 3 million persons over a 5 year period, by leveraging the strength of existing institutions under the textile ministry India has the most liberal and transparent policies in Foreign Direct Investment (FDI) amongst emerging countries. Under the automatic route, 100 per cent FDI is allowed in the textile sector. FDI in sectors to the extent permitted under automatic route does not require any prior approval either by the Government of India or Reserve Bank of India (RBI) The government has proposed some more relaxations for the branded garments sector, besides enhancement of duty abatement from 40 per cent to 55 per cent

Investment trends The textile industry plays a significant role in getting the foreign exchange reserves into the

country, contributing to approximately 15 per cent of the total exports from the country. Exports in textiles and apparel have registered a strong growth in last few years 11 per cent CAGR from 2004-05 to 2007-08. Indias liberalisation of its foreign investment regulations, buoyant domestic demand for textiles, and strong export potential have led to growing foreign investment in the country. The country has become one of the fastest growing destinations for FDI inflows and collaboration. Indias Special Economic Zones (SEZs) attract foreign investment by providing tax incentives, assistance with bureaucratic and administrative problems, and access to reliable infrastructure. Foreign companies have been motivated to enter into collaborations with Indian firms by the increasing profits gains that can be made by producing brands in India and selling them into the Indian market. Indian companies, on the other hand, have been motivated by the scope for gaining technical and marketing expertise from foreign partners.
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The textiles industry has attracted FDI worth US$ 956.97 million between April 2000 and March 2011, according to data released by the Department of Industrial Policy and Promotion (DIPP) Ahmedabad-based textile company Arvind Ltd. has tied up with another major international brand, Geoffrey Beene, LLC for apparel and non-apparel products. Geoffrey Beene has licensed Arvind Retail Ltd. to manufacture and market its men's apparel and non-apparel products Ahlstrom Corporation has announced investments of EUR 55 million (US$ 79.2 million) in new and expanded manufacturing capacity, including a new medical nonwovens plant to be built in India. The new medical nonwovens plant in India will use spunmelt technology and accounts for EUR 38 million (US$ 54.72 million) of the total investment announced. India and Russia have signed an agreement to increase investment and trade in textile industries in both the countries. A memorandum of understanding (MoU) was signed by the Apparel Export Promotion Council of India (AEPC) and Russian Union of Entrepreneurs of Textiles and Light Industry. The MoU also stipulates the promotion of textile trade, participation in fairs and exhibitions, transfer of technology and exchange of know-how in textile manufacturing and processing

The Road Ahead India's T&C industry has great potential, and is one of the mainstays of the countrys economy. The industry has enormous opportunities for domestic as well as international investors given its consistent growth performance, abundant cheap skilled manpower and growing domestic demand. With the abolition of quotas, India has surged ahead of other countries and positioned itself as a value-added manufacturer with a varied material base, an educated and Englishspeaking class of executives with high product development and design orientation. On the global front, India is set to become an even bigger participant, both as a consumer and as a producer. The country offers an attractive combination of a large domestic market, and a base for low cost production. The industry has gained a strong position in cotton based products, especially in the readymade garments and home furnishings segment, which are expected to be the key drivers of growth for the industry. Besides this, the T&C industry is contributing towards promoting inclusive growth. It has been contributing to broad based socio-economic development by providing employment opportunities at local level. The government envisions building state-of-the-art production capacities and achieving a preeminent global standing in the textile sector by 2020, which includes manufacture and export of all types of textiles.

Indias exports have registered a growth of 46.4 % during June 2011, at US$ 29.2 bn. Interacting with the media persons recently, Rahul Khullar, Commerce Secretary, informed that during the period April -June 2011, exports have reached a level of US$ 79 bn at a growth of 45.7 % while the imports were of the order of US$ 110.6 bn with a growth of 36 % and a trade deficit of negative US$ 31.6 bn, during the same period. During April-June 2011, exports by various industry sectors have done well viz., engineering, 94 % (US$ 23 bn); Gems & Jewellery, 19 % (US$ 9.25 bn); petroleum & oil products, 60 % (US$ 14 bn); manmade yarn & made -ups, 30 % (US$ 1.2 bn); electronics, 69 % (US$ 2.8 bn); Marine products, 27 % (0.6 bn); and leather registered the growth of 26 % (US$ 1.1 bn), while Indias exports of iron ore, fruits & vegetables and tobacco are on the negative growth because of ban on exports on these sectors, added Khullar. High growth in exports by 46.4 % during June 2011, at US$ 29.2 bn, has brought cheer in the trade and industry, said Ramu Deora, President, Federation of Indian Export Organisations (FIEO) and added that this is a reflection of the entrepreneurship of the exporters and governments supportive policies towards exports. During April-June 2011, exports by various industry sectors have done well viz., engineering, 94 % (US$ 23 bn); Gems & Jewellery, 19 % (US$ 9.25 bn); petroleum & oil products, 60 % (US$ 14 bn); manmade yarn & made -ups, 30 % (US$ 1.2 bn); electronics, 69 % (US$ 2.8 bn); Marine produ cts, 27 % (0.6 bn); and leather registered the growth of 26 % (US$ 1.1 bn), while Indias exports of iron ore, fruits & vegetables and tobacco are on the negative growth because of ban on exports on these sectors, added Khullar. High growth in exports by 46.4 % during June 2011, at US$ 29.2 bn, has brought cheer in the trade and industry, said Ramu Deora, President, Federation of Indian Export Organisations (FIEO) and added that this is a reflection of the entrepreneurship of the exporters and governments supportive policies towards exports. During the interaction, Commerce Secretary also informed that Indias imports in June 2011 were US$ 36.9 bn registering the growth of 42.4 %. Balance of trade for the month of June 2011 stood at negative US$ 7.7 bn. Regarding the consistently growing exports, Anand Sharma Indian Minister for Commerce & Industry said, With the export showing a steady growth, there is a growing satisfaction. If we keep growing at an excess of US$ 79 bn we can achieve our target by 2014. This growth is possible due to the collective efforts and endeavours of manufacturers and exporters. At the same time our imports are also increasing due to the high commodity prices especially high petroleum prices. The figures for the first quarter are q uite encouraging, hope that the industry continuous to grow.

According to him export growth is going to continue for another three months till September 2011. The growth trend will not be as good in the third and fourth quarters and will get restricted to around 35-40 % because of the planned withdrawal of DEPB from 01 October. He, however, suggested that DEPB should not be withdrawn till the implementation of GST in the country. Highlighting the growing non -conducive environment for exports from the coun try, Deora said that the recent hike of interest rates from 11 % to 11.25 % by SBI would make export finance costlier and Indian goods would become non -competitive in the international market. He added that the other banks would also follow suit and hike the interest rates to the level of 11.50 % or even higher in the days to come against earlier interest rate in the month of October 2010 when the rate was 7.1 % for both pre and post shipment credit. Already there has been an increase of interest rates by around 60 % in the recent past, Deora added. In lines with the 2 % interest subvention which was allowed to small and employment generating sectors of exports FIEO Chief requested the Finance Minister to reintroduce interest subvention of 2 % for the entire export industry. Citing the case of China which is offering export credit at the rate of 6.31 % to 6.56 % to the industry, Deora said that the high disparity in interest rates amongst competing countries makes Indian exports highly uncompetitive in the gl obal market and reiterated the importance and necessity of low cost competitive export credit to help continue the achieved growth momentum. Reacting to the import shipment data showing just 2.54 % growth in Indian apparel export volumes to the US; and 1.8 9 % decrease in volumes to the European Union in the first 4/5 months of the calendar 2011, Garments Exporters Association (GEA), the apex body of the garment exporters, said the international market, which was already highly competitive, has become more t ough. Speaking to Team Textile Treasure/Attire World, GEA President Rakesh Vaid said it is highly necessary for the industry in India to get easy access to pre and post shipment credits at much lower interest rates and higher drawback on exports to make up for high transaction costs and rising prices of inputs. Expressing the fear that rising interest rates would make the garment exports uncompetitive in overseas markets which are yet to fully recover from the slowdown after the global financial meltdown, he said the government should immediately consider granting suitable fiscal and commercial relief for the garment sector of the Textile Industry to enable it to face increasing international competition. He demanded extension of interest rate subvention facility on export credit to labour-intensive small scale a pparel exporters and requested the Government to extend the scheme of interest subvention of 2 % on pre - and post-shipment export credit to garment sector as before. According to him, the withdrawal of this facility along with steep and frequent hike in po licy rates to rein in inflation has directly impacted the interest rate regime on pre - and post-shipment credits rather the interest rates on such credits have gone up by over 50 %. Not only this, the export credit as a percentage of net banking credit has also declined. GEA Chief also pointed out that the problem of finance is comparatively more acute for the small scale garment exporting sector. It is, therefore, essential that adequate

facilities of Bank Credit for the garment sectors long term require ments and working capital are created immediately and the interest rate for export credit should be lowered substantially as high interest rate increase production as well as transaction costs of exporters. Besides, there is need to increase the current du ty drawback rates by increasing the scope and coverage of Duty Drawback Scheme so as to ensure full reimbursement of excise duties, custom duties, service tax, education cess and various state level taxes so as to provide exporters with the level playing field. Talking about the future outlook, Vaid said the declining trend in the growth rate of garment exports would continue and exports would remain below our potential and expectations because of various factors; more importantly the shrinking demand in both the major world markets like the US and the EU. Apart from this, there have been a number of indigenous factors, particularly high transaction costs, increasing input cost, tight credit policy, high interest rate, severe liquidity crunch, rigid and outdated labour laws, poor infrastructure, high power cost and frequent power cuts, increasing cost of wages and steep hikes in fabric prices, which are adversely impacting the competitive strength and performance of Indian Apparel Industry. Hoping that the policy-makers will wake up to the new realities soon and take some action, Rakesh Vaid said, With the dynamism of the industry entrepreneurs and strengths the industry possess, we can take on competition from China, Bangladesh, Vietnam and others. The app arel industry certainly needs pro -active approach by various government departments to streamline procedures and make fiscal corrections, added Vaid.

Recent Export Performance Difficult to Sustain in Coming Months: FICCI Results of FICCIs latest Export Survey shows that the outlook of exporters with regard to export performance is getting somewhat tempered and we can expect some moderation in near term export performance. Releasing the Survey Results, FICCI highlighted factors that have dampened exporters spirit as: The interest subvention scheme announced to support exporters during the period of global crisis came to an end in March 2011. This has led to a hike in the interest rates being charged by banks for export credit. Further, as withdrawal of i nterest subvention scheme has happened at a time when lending rates are in any case going up following increase in the base rates of banks, the impact on production cost structure is aggravated. The DEPB scheme is also likely to end soon. As this is comin g in quick succession following the withdrawal of the 2 percent interest subvention scheme, exporters are under reasonable pressure to maintain competitiveness in the global market. Exporters have drawn attention to the fact that Asia has contributed to s trong growth performance of our exports in recent times. Given this situation exporters are trying to build more inroads into the Asian markets. However, with inflation

emerging as a key macro challenge in many of the countries and with interest rates being hiked, demand in the Asian region is likely to ease somewhat in the coming months. This too will have a bearing on Indias export performance. Rising cost of raw materials and rising price of oil are also adversely affecting performance of exporters. In the present survey nearly 75 % of the respondents mentioned rising cost of raw materials as one of the factors that is troubling them. A few examples to consider here are: (a) Textiles (due to increasing cotton and yarn prices); (b) Chemicals (due to increasing polymer prices); (c) Metal products (due t high coal prices that is affecting power generation costs); (d) Engineering goods (due to increasing steel prices); (e) Tyres (due to increasing natural rubber prices); and (f) Processed foods (due to increasing prices of fruits and vegetables). Responses to the survey were obtained before the government announced extension of DEPB by another three months till September 2011. Further, nearly 50 % of the surveyed firms reported rising cost of oil as having a negative bearing on their export performance. Hardening of international crude prices has had two affects. First, it has led to an increase in the inland transportation costs with exporters pointing towards higher charges being demanded by transporters f or moving cargo from factory to ports. Second, international ocean freight rates have moved up and this has further increased the transportation costs. The rising price of oil, industrial inputs/raw materials and credit is forcing many exporters to consider increasing prices even at a time when heightened international competition calls for restraining price revisions. In the present survey nearly 68 percent of the respondents said that they will increase prices of exports in the coming six months. This i s expected to lead to a reduction in orders from overseas markets. A few exporters who have decided to hold on to their prices despite cost pressures are compromising on their ability to extend substantial credit to international buyers. This too is affecting business. Although the proportion of respondents complaining about exchange rate as a factor adversely affecting their exports has come down from 65 percent in the last survey to 43 % in the present survey, this issue cannot be discounted. Exporters have mentioned that currency fluctuations are making the task of forecasting revenue all the more difficult.

US Sees Apparel Imports Rising, Indian Export Volumes Register just 2.56 % Growth in Jan-May 2011 U.S. apparel imports during Jan -May 2011 rose 6.28 % to 9.40 bn SME, compared to Jan-May 2010. In value terms the imports posted a growth of 14.82 % from $ 25.12 bn to $ 28.84 bn. The imports of apparel made of all the major fabric segments were up during the period. While imports of apparel made of MMF fabrics increased the most at 24.21 % touching a value of $ 9.36 bn, the imports of silk/veg apparel followed it by posting a growth of 20.40 % to $ 878.07 mn. Cotton and wool apparel imports also recorded g rowth of 10.13 % and 16.76 % respectively at $ 17.86 bn and $ 737.69 mn. US imports continued to expand from all the top 10 trading partners. U.S. apparel imports from China fell 0.75 % to 3.23 bn SME worth $ 9.40 bn during Jan -May 2011, which remained th e largest apparel supplier to the United States. The list of top 10 apparel suppliers to the US also contained the names that followed China as Vietnam, Indonesia, Bangladesh, India, Mexico, Honduras, Cambodia, Salvador, Pakistan and Sri Lanka. While Vietnam posted an increase of 18.96 % in exporting apparel products to the US worth $ 2.55 bn and attained the position of second largest supplier, Indonesias exports increased 19.85 % at $ 2.14 bn and was the third largest supplier to the US. Similarly, US apparel imports from other countries also increased, such as, #4 Bangladesh (32.61 %); #5 India (14.00 %); #6 Mexico (7.13 %); #7 Honduras (17.19 %); #8 Cambodia (28.68 %); #9 Salvador (18.65 %); #10 Pakistan (27.91 %); and #11 Sri Lanka (14.58 %). Indian apparel exports to the US posted an increase of 14 % at $ 1.62 bn in Jan May 2011. In volume terms also, its exports showed a positive growth of 2.56 %. In all the fibre segments, except silk/veg, Indian apparel exports registered positive growth. While its exports of MMF apparel recorded the highest positive growth of 45.79 % at $ 210.68 mn, the exports of cotton apparel posted positive growth of 10.90 % at $ 1.36 bn and wool apparel exports registered a growth of 2.27 % at $ 20.17 mn. However, the expor ts of silk/veg apparel decreased 3.50 % at $ 30.68 mn. During Jan-May 2011, Bangladesh earned export revenues totaling $ 1.97 bn, which is up 32.61 % from $ 1.48 bn earned in the previous year. However, in volume terms, its exports increased 15.76 % from 635.32 mn m2 to 735.46 mn m2. Other South Asian nations, Pakistan and Sri Lanka too achieved more than what they could in Jan-May 2010. Pakistans apparel exports showed an increase of 27.91 % at $ 662.26 mn, while from Sri Lanka, the exports amounted to $ 579.46 mn, up 14.58 %. China also recorded 9.40 % growth at $ 9.40 bn in this market, while in volume terms its exports declined 0.75 % from 3.26 bn m2 to 3.23 bn m2. The average import price per unit, in Jan -May 2011, was $ 3.06 per m2, 7.74 % more than $ 2.84 per m2 achieved in the same period of previous year. The average

import unit prices for all the segments went up 10.84 % (cotton apparel), 3.19 % (wool apparel), 5.46 % (MMF apparel) and 0.83 % (silk/veg. apparel) from $ 2.95 per m2 to $ 3.27 per m2; from $ 15.96 to $ 16.47 per m2; from $ 2.38 to $ 2.51 per m2; and from $ 4.82 to $ 4.86 per m2 respectively. Not only India, but all others from within South Asia as well as China also were able to realize enhanced average unit values during Jan -May 2011 when compared with the same period last year. While Indias unit value realization in Jan -May 2011 was better by 11.25 % at $ 3.46 per m2, Pakistan realized a unit value of $ 2.42 per m2 as against $ 2.00 per m2, an increase of 21.60 % and Sri Lanka managed to realize 5.09 % more at $ 3.92 per m2. Similarly, Bangladesh also realized a UVR of $ 2.68 per m2 as against $ 2.34 per m2, up 14.52 %. Chinas realization too went up 10.26 % at $ 2.90 per m2 as compared to $ 2.63 per m2 it realized in Jan -May 2010.

EU Apparel Imports Surge 19.02 % in Jan-April 2011, Indias Export Volumes Decrease EU apparel imports during Jan -April 2011 were up 19.02 % at 21.64 bn, as against 18.18 bn of Jan-April 2010. Imports of woven apparel, during the period, were up 18.95 % to 11.51 bn, while for knitted apparel, the imports went up 19.09 % to 10.12 bn. In volume terms, the imports were up only 2.87 % on overall basis to 1.32 bn kg. Imports of woven apparel were up 2.25 %, while knitted apparel import volumes rose 3.05 %. Indian apparel exports, which were to the tune of 1.55 bn in Jan -April 2010, could touch a figure of 1.93 bn in Jan -April 2011. Its knitted apparel exports during the period recorded an increase of 21.25 % from 659.76 mn to 800.01 mn, wh ile its exports of woven apparel were up 26.74 % to 1129.78 mn from 891.41 mn. Volume-wise, however, its exports posted a decrease of 1.89 %. In the period Jan-April 2011, Bangladesh exported apparel valued at 2.41 bn, up 46.12 % from 1.65 bn. Whi le Bangladeshs exports of woven apparel rose 48.14 % from 570.92 mn to 845.76 mn, knitted apparel exports amounted to 1563.69 mn, up 45.06 % from 1077.97 mn. Other South Asian apparel suppliers, Pakistan and Sri Lanka too registered high positive growth during the year. While Pakistan exported apparel worth 418.64 mn, up 40.92 % from 297.08 mn, Sri Lankas apparel exports to the EU showed an increase of 9.38 % from 394.36 mn to 431.36 mn. China too recorded strong growth of 14.91 % in the period at 8.67 bn as against 7.54 bn, while in volume terms, its exports were down 2.01 %. Its knitted apparel exports posted a growth of 13.65 % at 3.60 bn, while in the woven segment, it could achieve a growth of 15.83 % at 5.07 bn. The average import price per unit in the EU market was up at 15.92 %, during Jan April 2011, to 16.38 per kg from 14.13 per kg in Jan -April 2010. Average unit import price for knitted apparel during this period was up 15.54 % from 12.61 to

14.57 per kg, while for woven apparel, it was up 16.34 % from 15.79 per kg to 18.37 per kg. Unit value realisation by India on export of apparel products to the EU during the period increased 26.79 % at 21.53 per kg from 16.98 per kg. While its UVR for knitted appar el increased 19.42 % at 16.66 per kg, the UVR for woven apparel was up 34.15 % from 20.23 to 27.14 per kg. For Bangladesh the unit value realisation this year was 11.15 per kg, up 26.27 % from 8.83 per kg, while the UVR by Sri Lanka went up 9.57 % from 16.30 to 17.86 per kg and Pakistan realized 25.22 % more at 9.98 per kg. Chinas average UVR, which was 12.44 per kg in Jan -April 2010, is also up 17.28 % to 14.59 per kg in Jan -April 2011. Its average unit value realisation for knitted apparel increased 15.74 % from 11.56 to 13.38 per kg, while for woven products, China realised 15.59 as compared to 13.16 per kg, up 18.46 %.

Canadian Apparel Imports Post Strong Growth in Jan-May 2011, India also Posts over 24 % Export Growth Canadian apparel imports in Jan -May 2011 posted an increase of 21.1 % to US$ 3.16 bn from US$ 2.61 bn in Jan -May 2010, almost equally contributed by import growth in both knitted and woven apparel products, as revealed through the trade data made public by Industry Canada. The imports of knitted apparel posted 22.7 % growth to $ 1.55 bn from $ 1.26 bn, while the imports of woven apparel were up 19.5 % from $ 1.35 bn to $ 1.61 bn. The report of the Canadian international trade department shows China as the lead supplier of apparel products, with a growth of 15.0 % at $ 1.46 bn, followed by Bangladesh ($ 391.21 mn, up 56.6 %); Cambodia ($ 174.80 mn, up 64.7 %); USA ($ 184.81 mn, down 0.9 %); India ($ 153.51 mn, up 24.7 %); Mexico ($ 111.55 mn, up 7.0 %); Vietnam ($ 105.58 mn, up 25.3 %); Indonesia ($ 90.11 mn, up 50.2 %); Italy ($ 62.76 mn, up 19.2 %); and Turkey ($ 40.35 mn, up 9.8 %). Bangladesh, Sri Lanka and Pakistan, from within South Asia, continued to occupy second, twelfth and thirteenth positions in the list of largest apparel suppliers to Canada, while India stood at fifth position. In the current year so far, Indian apparel exports have posted a growth of 24.7 % at $ 153.51 mn. Its exports in Jan-May 2011, in fact, increased in both knitted and woven segments. While its exports of knitted apparel, which were to the tune of $ 57.15 mn in Jan-May 2010, is up 26.1 % to $ 72.08 mn, in the woven segment its exports grew 23.4 % to $ 81.43 mn. To Canada, China registered positive growth of 15.0 % at $ 1.4 6 bn, contributed almost equally by both knitted and woven segments, while Bangladesh posted a strong overall growth of 56.6 % at $ 391.21 mn, making great strides both (growth being 57.8 % and 55.5 % respectively) in the knitted and woven segments.

Pakistan and Sri Lanka too recorded strong growth, overall, at 19.3 % to $ 33.68 mn and at 39.0 % to $ 34.19 mn respectively. While Pakistans growth got strength from the knitted segment, where it posted a growth of 23.4 %, Sri Lankas overall growth received major contributions from both knitted (growth being 41.7 %) and woven (growth being 36.6 %) segments.

Exports Sri Lanka: Apparel exports looking for market diversification The Sri Lankan apparel industry seeks more bilateral partnerships and free trade agreements with India, China, Brazil, Russia and Japan to increase export volume while attracting more preferential treatment for the industry wellbeing. Having understood the risks of depending on traditional markets and following the abolition of industry related concessions, attention has been given to go for export market diversification. Speaking to Daily News Business Joint Apparel Association Forum Secretary General M P T Cooray said Sri Lanka needs to increase the three million pieces quota upto 120 million in the future under the Free Trade Agreement (FTA) signed with India in order to better tap post -war opportunities. The Sri Lankan apparel industry has entered into two agreements with India under the FTA named three million pieces and eight million pieces quota agreements. According to the three million pieces quota agreement, the Sri Lankan apparel industry is entitled to import fabrics and other related objects fr om any destination and export apparels with value addition to India. Under the eight million pieces quota agreement, Sri Lanka is able to import fabrics and other apparel industry related objects only from India and again export finished apparel items only to India, which is not much profitable for the industry. However, three million pieces quota agreement with India provides opportunities for Sri Lanka to exploit the Indian market since India possesses an upper middle class who has a relatively high disposable income. When Sri Lankan apparels are exported to Japan, we have to pay high duty. In order to mitigate the present obstacles, we are looking at possibilities to enter into some sort of free trade agreement with Japan to get preferential treatment in the future. In addition , there is a good demand for apparels in China, Russia and Brazil and government seeks to strengthen the bilateral relationship with these countries aggressively to increase Sri Lankan apparel export volumes to these countries i n the future, Cooray said.