Dear Friends,

As FY 2024-25 dawns, the signs of revival seen in the US market have raised the hopes for exports to improve in the upcoming months. According to CRISIL, India’s textiles industry is expected to rebound in calendar year (CY) 2024 on three tailwinds: consistent improvement in domestic demand, gradual recovery in exports and balancing raw material prices.

Reports suggest good tidings for the textiles industry on account of the pick-up seen in India's industrial production by 3.8 per cent in the first month of calendar year (CY) 2024.  After experiencing contraction for a year, textile production and exports are trotting back to normal, suggest experts. A steady reduction of inventory pileup during the holiday season in the West continues to drive export demand. With improving consumer demand big retailers in the overseas markets will have to restock inventory, leading to improvements in the order flow.

Bharat-Tex 2024 Success Celebrations

Marking an exceptional celebration of the country's rich textile heritage, its modern capabilities and innovations, Bharat Tex 2024 held in New Delhi, concluded its maiden edition with resounding success. The event, inaugurated by Prime Minister Shri Narendra Modi, witnessed an overwhelming response from both Indian and global participants, including top brands and retailers.

The entire textile industry celebrated the remarkable success of Bharat Tex 2024, with the post-show celebration held on 18 March, 2024 in Mumbai, graced by the presence of Shri Piyush Goyal, Minister of Textiles, Minister of Commerce and Industry, and Minister of Consumer Affairs, Food and Public Distribution.

The journey of Bharat Tex has been truly monumental, spanning from conceptualization to execution, all accomplished in a mere five-month timeframe. Held from 26-29 February 2024, the expo concluded on a high note, successfully achieving its goal of highlighting the immense potential of India's textile sector on the global stage. The next edition of the mega textile event is being planned to be held during the last week of February 2025.

India-EFTA TEPA

India-European Free Trade Association signed a Trade and Economic Partnership Agreement (TEPA) on 10th March 2024. India has been working on a TEPA with EFTA countries comprising Switzerland, Iceland, Norway & Liechtenstein. The Union Cabinet chaired by the Hon’ble Prime Minister has approved signing of the TEPA with EFTA States.

EFTA is an important regional group, with several growing opportunities for enhancing international trade in goods and services. EFTA is one important economic block out of the three (other two - EU &UK) in Europe. Among EFTA countries, Switzerland is the largest trading partner of India followed by Norway.

TEPA is a modern and ambitious Trade Agreement. For the first time, India is signing an FTA with four developed nations - an important economic bloc in Europe. Also, in the history of FTAs, for the first time a binding commitment of USD 100 billion investment and 1 million direct jobs in the next 15 years has been given.

Minimum Import Price on Knitted Fabrics

The Central Board of Indirect taxes and Customs (CBIC), vide notification no. 77/2023 dated 16th March 2024 has imposed a minimum import price of US Dollar 3.50 per Kilogram on five specific HS codes of synthetic knitted fabrics, namely 60063100, 60063200, 60063300, 60063400, and 60069000. This notification is effective immediately and will remain in place until September 15, 2024.

The domestic industry had been consistently demanding the imposition of MIP to restrict the influx of cheaper synthetic fabric. The alleged dumping of synthetic fabric, especially from China, based on under-invoicing practices, was causing significant damage to the domestic synthetic fabric industry. During a Textile Advisory Group (TAG) meeting in January 2024, the Government had assured the industry that the issue of undervalued imports of knitted fabrics would be addressed within a few months.

The enforcement of MIP provides much-needed relief to an industry that has suffered from this practice for years and is seen as a crucial step in protecting the domestic industry and ensuring a fair marketplace for all stakeholders. The decision is expected to effectively curb the import of undervalued synthetic knitted fabrics being dumped into India, thus encouraging the industry to continue upholding the standards to foster growth, innovation, and prosperity within the textile sector.

Recovery on the horizon

As concerns the Indian textile industry, the fiscal year gone by was one of the most challenging years, posing challenges like raw material availability, price volatility, diminishing demand, capacity under-utilization and dumping of imported fabrics and garments from China and Bangladesh. The buying by the US and EU has remained quite low and that too for an unusually longer period, which has affected the exports badly and emerged as a drag on growth.

An early estimate of target vis-à-vis achievement for the textiles sector in India suggests that target for the current fiscal year is again likely to be missed. Overall, textiles and clothing are projected to achieve around USD 34 billion against the target of around USD 42 billion achieving 81% of the target during the period April 2023 to Mar 2024. With all the segments in the textile sector achieving almost the same level of performance, the cotton textiles are likely to perform slightly better achieving 85% of the target in FY 2023-24.

Given the substantial pent-up demand from the preceding year, the basis for target fixation in cotton textiles exports from India was considerably high. Consequently, the performance observed during the fiscal year 2023-24 stands as credible evidence of exports reclaiming the momentum witnessed prior to the pandemic.   

Friends, it is well-known that many of the world's largest economies held up reasonably well considering the sheer breadth of the headwinds they faced in the last two years, including high interest rates, the stress in interest rate-sensitive and energy-intensive industries, volatile commodity prices, fiscal consolidation, a strong dollar and conflicts in places integral to the global economy.

The rating agency, Moodys in its latest global macroeconomic outlook report also expects a steady normalization in economic activity through this year (CY2024) and next (CY2025) across advanced and emerging market countries. This has raised the hopes of developing economies like India to pose a better performance in the Fiscal 2024-25.

Fiscal 2024-25: A year of re-strategizing!

FY 2024-25: will be a year of re-strategizing for the Indian textile industry, and more so for the economy that has typically been driven by domestic consumption, followed by investments and exports.

A recent report by RBI suggested that the country’s economy needs to grow by at least 7% in 2024-25, to sustain the growth in the ongoing financial year. Further, in order to meet the growth aspirations, the government’s thrust on investments needs to be partnered by the corporate sector, and supplemented by foreign direct investments, the report added.

Going forward, the direction is clear, a distinct strategy being implemented thoroughly can prove to be a game changer to India’s trade growth and the economy’s growth expectations.

Towards this end, the Council is working on the suggestions for a 100-day action plan to be implemented by the new government after the polls. The idea is to develop a roadmap based on a “comprehensive blueprint with clearly articulated national vision, aspirations, goals and action points”. I earnestly appeal to all our members to send in their valuable suggestions and contribute towards development of ‘Viksit Bharat’ by 2047.

Wish you all a prosperous FY 2024-25!



:: TEXPROCIL ::