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India loses 46pc global textile market, China gains 700pc


NEW DELHI, December 29: The phasing out of the quota regime has led to a 700 per cent hike in China's market share in global textiles exports, while India lost 46 per cent market share in the global textile trade, according to an Assocham study on the Indian textile sector, an internet report by Sify Finance said.
The study titled 'Post ATC: Competitiveness and Protectionism: A Study on India's Textile Sector' revealed that China's share in the global textile market which was around 9.0 per cent in 2001 went up to 72.3 per cent in 2005, against India's share of textile exports which was 2.8 per cent in 2001 and went down to 1.6 per cent in 2005.
The major reason for the massive rise of Chinese textile exports in the global market is not only because China has been offering a competitive edge over its rivals, but also due to the opening up of its retail sector to multinational corporations (MNCs). This contributed largely to the sale of Chinese apparels outside the country also, the study said.
In India's case however, the country lost its exports edge because it failed to create a supply value chain for its textile products by continuing to deny MNCs retail entry into the country, Assocham President Anil K Agarwal said.
Out of 70 leading retailers, the world over, 40 well known names have been operating in various provinces of China without adversely affecting their domestic retail chain, he added.
The Assocham study also sought a $ 0.5 billion investment in India's textile sector, which would result in an increase of $ 1.0 billion worth Indian textile exports in the international market. It would also enable India to achieve the $ 50 billion export target by 2010, with a $ 25 billion investment. This would also generate 12 million new job opportunities of which at least 70 per cent would be in rural India.
The industry chamber has pointed out that India is the only major economy, which still does not permit foreign direct investment (FDI) in retail. In China, 40 of the world's top 70 retailers have already entered and set up business. They have helped boost exports. Wal-Mart alone exported in 2002 about $ 12 billion worth of goods. FDI thereby has been playing a significant role in China's goal of becoming the world's largest producer and exporter of textiles.