India'S Textile And Clothing Exports Declined Sharply As Bangladesh And Vietnam Were Granted Preferential Tax Exemption From The European Union.

India's textile and clothing industry is facing strong headwinds because its competitors, Bangladesh and Vietnam, enjoy preferential access in the European Union (EU), the main textile market in India. This may make India garment exporters more and more difficult to maintain their competitiveness in the European Union.

The European Union accounts for more than 1/3 of India's clothing exports. In the second quarter of fiscal year 2019, India's container exports to China also dropped by 20%, mainly due to the decline in demand for textiles and clothing made by India, while textiles and clothing were the bulk export commodities of the same period last year.

Jayanta Roy, senior vice president and group leader of ICRA business rating, said: "India textile industry is still not optimistic about the retail market in the us except for challenges in the EU market. This may create additional pressure on the future orders of India garment exporters. The external environment of India's garment export enterprises is still challenging, and the degree of activity of many free trade agreements among major trading nations has increased, which has intensified the competition of countries with cost advantages.

The Sino US trade war is expected to bring opportunities for India's industry to fill the gap, thereby promoting the development of India's industry. However, India's main competitors get much more profits than India. ICRA said in a report that although India's large exporters are in a favorable position and can benefit from market opportunities, it requires enterprises to expand their business in a short time, maintain a strict delivery schedule and meet strict compliance requirements of buyers.

Small and medium-sized enterprises in the textile and clothing industries have limited bargaining power, and are dependent on small American retailers. They are facing performance pressures and are more vulnerable to economic slowdown.

At the same time, due to the combined influence of international factors (such as slowing trade growth, intensified trade tensions and domestic factors in India), the growth rate of container transport trade in India in the second quarter of fiscal 2019 slowed to 1% from 9% in the same period last year.

Steve Felder, managing director of Maersk Logistics South Asia, said: "as the global turmoil intensifies, the local economy slows down and the United States cancels preferential access to certain India products, India's import and export trade is expected to be adversely affected in the coming months."

Steve Felder added: "integration and enhancement of the logistics value chain, together with new technologies such as block chaining and artificial intelligence in the entire logistics network, and joint efforts to improve port and road infrastructure, will ensure that farmers, MSME and small businesses jointly promote India's economic growth and maintain competitiveness in trade."