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Cotton textile export target going haywire
The target for exports of cotton textiles from the country in 2003-04, which
was fixed at US $ 4200 million, has gone haywire. Not only that even actual
exports during the year have also fallen short of the previous year’s level,
if one goes by the statistics in this regard available from the Central Statistical
Organisation (CSO). This may raise some doubt about our ability to push up the
exports to any significant extent during the quota-free era which is scheduled
to begin from January 2005.
It might be interesting to note that according to these figures, actual exports
of cotton textiles (including handloom products) in 2003-04 amounted to US $3302.18
million against the target US $4200 million fixed for the year. For the earlier
year, the target was fixed at US $4000 million, but actual exports were of the
order of US $3486.85 million only indicating a shortfall of nearly 12 per cent.
Despite the problems experienced in reaching the target for that year, the authorities
stepped up the export target for 2003-04 to US $4200 million, as if fixing of
a higher target can automatically result in larger exports, irrespective of
other circumstances. Actual exports of cotton textiles including handloom products
in 2003-04 have, according to the provisional official statistics, have, in
stead of moving up, dropped down further to US $3302.18 million from US $3486.85
million in the earlier year, indicating an actual fall of nearly 5.30 per cent.
This makes it clear that all is not well with our cotton textile exports. Of
course, some observers are highly optimistic about prospects of these exports
once the present quota restrictions come to an end.
They argue that as a result of abolition of the quota system, vast markets in
the European Union, USA and Canada will open up, making it possible for us to
push up our exports. On the other hand, some observers are against taking such
a facile view about our cotton textile exports in the coming years. They argue
that just as these markets will open up for us they will do so for other competing
countries as well, such as China, Indonesia, Pakistan, Bangladesh, Turkey, Syria
and Brazil apart for some countries in Central Asia and Africa. Under such a
situation, there might be cut throat competition in various importing countries
leading to the creation of a buyer’s market globally. Under such a scenario
only those countries which are competitive not only in prices, but also in quality
and services will be the real gainers.
While this may be the overall situation, so far as our textile industry in general
is concerned, some individual units which have attended to the need for constant
modernaisation of their manufacturing facilities might be able to take advantage
of the open market system, when the quota system comes to an end. But it may
be difficult to predict to what extent the industry as a whole will benefit
from the abolition of the quota system, despite high hopes being entertained
in several quarters in this regard.
- M D Dewani
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