Despite export slowdown, target kept intact

Even as the industry is struggling to cope with the appreciating rupee and high interest rates...

Even as the industry is struggling to cope with the appreciating rupee and high interest rates, the ministry of textiles has turned a blind eye to the reality 8212; fixing the target for exports this year at a high 25.06 billion. This represents a 34 per cent jump over the 2006-07 figure of 18.73 billion and sits absurdly with the ministry8217;s own export figures for the first quarter of this fiscal, which declined by 13 per cent. In Q1 2007-08 exports were 4.01 billion, down from 4.6 billion a year before.

Addressing the sixth meeting of the Parliamentary consultative committee for textile, minister of state for textiles E V K S Elangovan said the target will remain at 25.06 billion despite a relative slowdown in growth. 8220;The target has been fixed keeping in mind the growth that has taken place in this sector after the termination of the Multi-Fibre Agreement MFA. Post-MFA, exports took a giant leap in 2005-06 with an increase of 25 per cent, but the momentum could not be maintained in 2006-07 when the growth was only 7 per cent,8221; he said.

With the rupee continuing to gallop, the industry believes that achieving the target is at best difficult and at worst impossible. 8220;Post-MFA, apparel sector grew by 31 per cent, but in the next fiscal 2006-07 the growth was a meager 3.19 per cent. There is a widespread feeling that the growth could be in the negative this year,8221; said Apparel Export Promotion Council chairman Vijay Agarwal. Exports in the garment segment alone are expected to report 18-22 per cent decline this year, down from Rs 40,280 crore to Rs 31,400 crore. The ministry had also missed its target for garment exports in 2006-07.

Though many steps have been taken to arrest the slide, including three relief packages in the last eight months, things are not likely to change at least in the current fiscal. 8220;We will perhaps be able to match the 2006 figures this year, but there may be a decline as well. The prospects of growth are very bleak,8221; said Confederation of Indian Textile Industries CITI secretary general D K Nair.

The numbers game

8226;Exports grew 25 in 05-06 038; 7 in 06-07. Ministry expects 34 growth this year

8226;Q1 exports declined 13

8226;Exchange rate fluctuation 14 in last one year

8226;Apparel and garment sector worst hit. Garment exports to decline 18-22

8226;Industry estimates flat to negative growth this year