An article published in the latest issue of the International Monetary Fund (IMF) Survey clearly states that India has a long way to go before it can emulate China and capture larger global textile market share.
Authored by A Prasad and Sonali Jain-Chandra, both from the IMF Office of Executive Directors and Policy Development and Review Department, the report says textile and clothing export quotas elimination on January 1, 2005, led some countries, notably China, to quickly expand their share of the global export market.
The paper examines the country's prospects and suggests that India's gains will be limited without stepped-up reforms and more investment to bolster the sector's competitiveness.
Acknowledging that textile and clothing sector plays important role in the country's economy, including its exports, the paper states that in 2003, the sector contributed 4 percent to GDP and 14 percent to value add in manufacturing, employed 35 million people (about 10 percent of the workforce), and accounted for $13 billion in exports (23 percent of total exports).
While Chinese textile exports to the US reached 242 percent in 2005, India's grew only by 34 percent, mentions the paper.
It further notes the advantages India has in terms of large and relatively low-cost labor force, a sizable domestic supply of fabrics, a strong and diverse raw material base for manufacturing natural and artificial fibers, and a capacity-based advantagein spinning.
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