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"India was renowned for its varied textiles in the trade of the pre-industrial era. Many foreign travelers like Ibn Batuta have left elaborate accounts of the exquisite textiles sold in the markets during the Sultanate period. In ancient times, Indian textiles were traded with China, Indonesia as well as with the Roman world. The Roman merchant navy was eventually replaced by Arab traders and thereafter by the Portuguese, after Vasco da Gama arrived in India at the end of the 15th century. In course of time, during the 16th century, European companies established base in the sub-continent and became a part of this lucrative commercial connection. India became the largest exporter of textiles the world had ever known, with the textiles trade reaching its height in the 18th and 19th centuries. During the Mughal era, the chief imports of the country included bullion, raw silk, horses, ivory and precious stones, velvet and brocades. Exports were largely various textiles, indigo, spices and miscellaneous goods. Traffic along land routes was restricted and insecure; therefore sea routes and rivers were more advantageous for commercial purposes. Indian textiles dominated the Indian Ocean trade with Southeast Asia for centuries. Overseas markets bought Indian cloth which was not only cheaper but beautiful; surviving cargo manifests suggest that designers in India created patterns targeted at the specific needs of these markets and experimented with new weaves and patterns. Indian weavers and dyers were capable of handling global range of techniques and of changing these rapidly in response to shifts in demand. The popularity of Indian textiles can be gauged by the number of words that have made their way into the English lexicon: calico, pajama, muslin, gingham, shawl, dungaree, chintz, and khaki. Global Trade; Treads Indian textiles have been subjected to the doldrums of history. Under colonialism, India was subject to huge imports of machine made cheap textiles and piece goods that reduced home spinning and displaced weavers. In more recent times, the dynamics of globalization and change have ushered in an era of challenges from multiple manufacturing hubs and integrated global supply chains. The varied handlooms of India, however, continue to be prized products and command niche markets. In the past few years, global trade growth has been sluggish with slow and uneven recovery in major developed countries and moderated growth in developing countries. Growth in the volume of world trade is expected to continue to remain sluggish this year (2016) at 2.8 per cent, unchanged from 2015. Imports of developed countries are expected to be moderate this year while demand for imported goods in developing Asian economies is expected to pick up according to the WTO. Global trade growth should rise to 3.6 per cent in 2017, as reported by WTO economists. The global trading environment today is inherently challenging. Over the years, India’s direction of trade has gradually shifted to emerging markets although traditional markets like the US and the EU continue to be important strongholds for our T&C exports.   In the above context, slowing down of the Chinese economy assumes significance as it can impact emerging economies, smaller developing countries and economies in transition. There are also fears that it could unsettle the fragile recovery in developed countries, particularly in the euro zone. Historically, development of the textiles industry was a stepping stone towards industrialization providing large number of jobs to women and the less-skilled. If the textiles sector were to become a smaller part of the Chinese economy which is transiting to high-skilled jobs in other manufacturing sectors and in the rapidly expanding services sectors, this may trigger a new phase in global textiles trade and India should seize the opportunities that are likely to emerge, although China will continue to be the largest exporter. RTAs will also play an important role in our choice of markets. RTAs also can potentially lead to trade diversion that may not be to our advantage. Global Textiles Exports The current global apparel market is estimated at US$1,100bn with trade value of more than US$750BN. EU is the largest consumer market, reaching US$350bn per annum. Global textile and apparel sector is forecast to grow at a Compound Annual Growth Rate (CAGR) of 5 per cent per year to reach around US$2,100bn by 2025. The world’s largest clothing exporter is China with a share of around 35-39 per cent of world clothing exports, followed by the EU, Bangladesh, Hong Kong, Vietnam, India, Turkey, Indonesia, the USA and Cambodia. The world’s largest clothing importer is the EU with a share of around 35-38 per cent of world clothing imports while the USA has a share of around 18 per cent and Japan of about 6 per cent. Next in importance is Hong Kong, followed by Canada, Russia, South Korea, Australia, Switzerland and China. But these seven importers have only a small share of world clothing imports. China will continue to be the dominant supplier of textiles and apparel over the next five years of so. China has successfully attracted investment for construction and modernization/up gradation of textile mills and facilities and is a leading importer of textile machinery. It will, therefore, need an expanding global market but increasing domestic demand is likely to offset any shrinkage in the global market. India’s Exports of Textiles & Clothing As per WTO International Trade Statistics 2015, India is the third largest exporter of textiles in the world with 5.8 per cent of the global share in 2014. Out of the total exports of around US $41 billion in 2014, $18.3 billion was textiles export against the world trade of US $314 billion. India is the sixth largest exporter of clothing (RMG) in the world with 3.7 per cent of the global share. Out of total exports of US $41 billion, $18 billion was clothing (RMG) export against the world trade of US $483 billion in 2014. The export earnings of the Indian textile industry give it added value and strength. However, despite poor global market conditions and domestic challenges which include escalating energy cost, high transportation costs and sticky labour laws, the textile industry did well as compared to other sectors on the export front and textiles accounted for as much as 14 per cent of India’s total exports in 2015-16. New Manufacturing Hubs The competitive advantage that India had, in terms of its low labour costs, has been eroding slowly due to competition from countries like Bangladesh and Vietnam that offer a skilled workforce and cheaper labour. The export-oriented industrial sector in Bangladesh already accounts for more than a quarter of GDP and is expected to continue to develop as a global manufacturing hub. Other than Bangladesh and Vietnam, countries including Cambodia, Ethiopia and Myanmar are the newest potential competitors in world RMG trade. The clothing industry in Myanmar is forecast to grow significantly in coming years. It is predicted that there could be up to 1.5 million jobs in the garment industry by 2020 compared with approximately 230,000 in mid-2015. Myanmar has published a strategy for the textile and garment industry as part of a document, titled National Export Strategy 2015-2019 to push the industry to move from operating on a cutting, making and packaging (CMP) basis to operating on an FOB (free-on-board) basis to produce greater volumes and improve quality of knitted products with the aim of building export markets. Ethiopia has all the essential ingredients for a competitive textile industry: raw materials, low wages and low energy costs. The basis for the enormous growth potential for the textile industry is the local production of cotton which is well integrated into the textile sector, with garment factories relying on domestically produced cotton. Ethiopia is actively promoting the further modernization of the textile sector with the aim of attracting foreign investors. New export opportunities were created through the AGOA (the African Growth and Opportunity Act), COMESA (the Common Market of Eastern and Sothern Africa) and many bilateral trade agreements. Ethiopia is also part of the “Everything but Arms” program set up to provide access to the E.U. market for Lesser Developed Beneficiary Countries. According to data published by the World Bank, the annual GDP growth rate in 2015 of Bangladesh, Cambodia, Ethiopia, Myanmar and Vietnam was 6.6 per cent, 7 per cent, 9.6 per cent, 7 per cent and 6.7 per cent respectively. These countries are the new manufacturing and export-oriented hubs, building capacities for job creation and benefiting with investment and manufacturing moving away from China. The SE Asian region is likely to develop a large consumer base in course of time. According to Textile Intelligence Ltd, 2016, the African textile import market has grown significantly since the African Growth and Opportunity Act (AGOA) was implemented in 2000. The act was designed partly to boost garment manufacture in the region by providing exporters in certain Sub-Saharan African countries with duty-free and quota-free access to the US market. Since its enactment, garment exports from a number of Sub-Saharan African countries have increased; so has garment production in the region and this has led to greater demand for imported textile materials. However, the act aims to encourage the development of a complete supply chain in Sub-Saharan Africa through the establishment of spinning, weaving, dyeing and finishing facilities and specifies that garments must be made from materials produced within the region (or in the USA) in order to qualify for preferential access to the USA. Africa has huge potential if it pursues a strategy beyond resource commodities and agriculture as is being done by Nigeria and Ethiopia. It is understood that, in as many of the 11 countries which represent 50 per cent of Africa’s GDP, there are about 15 million households in the middle class which is predicted to grow to about 42 million by 2030. However, in Africa, challenges persist with security risks and political instability and with health risks and infrastructure problems that include insufficient access to water and electricity. Emerging Markets Interestingly, the top 10 markets for our textiles exports are also countries with which India has no FTA or PTA, with the exception of Bangladesh which is a part of SAFTA. Diversification of markets based on the changing dynamics of growth in the world economy is important to ensure sustained growth of exports and we need to look at engagements in countries/regions that are promising markets for our textiles. International demand is primarily for man-made fibres unlike natural fibres like cotton or wool. This may bring in elements of uncertainty as smaller enterprises can be affected by raw material price volatility and also by wage costs. Further, in order to be competitive in overseas markets, the sector needs to adapt and respond swiftly to fast moving fashion trends and consumer choices which vary by age groups. The demand for Indian exports in the traditional developed markets i.e. North America and Europe is projected to slow down and from the trade angle will pose a challenge to Indian exports vis-s-vis our competitors if the TPP were to be ratified. As compared to this, the momentum of future growth would possibly lie with Developing and Emerging Economies which are expected to register relatively higher growth rates. Growth would be driven by long-term demand due to the emergence of stronger middle classes in these emerging markets. Markets in Latin America, ASEAN, Eurasia and WANA and others like Turkey, Canada and Australia should, therefore, be focus areas in any strategy for market diversification. The West Asia and North African region (WANA) is a dynamically growing region. India has been attempting to negotiate an FTA in this region with Israel. Israel’s apparel industry relies on imports of most of its yarn and woven fabric requirements. Israel recorded a CAGR growth of 5 per cent in imports of apparel (US$ 1.5bln in 2015) and India accounted for a share of only 1 per cent. India’s share in imports of home textiles of Israel (0.2bln in 2015) was higher at 6 per cent. Egypt has the largest cotton and textile clusters in the African continent. The textile industry, the largest in Egyptian economy, also relies on imports of yarn, fabrics and other items. Egypt’s imports of apparel recorded a whopping CAGR increase of 17 per cent in 2015 (0.2 bln) and India’s share was only 1 per cent. The textile economy is predominantly cotton based, but in recent times, demand for man-made fibre textiles in the country has been increasing. MMF textile imports have been growing steadily. CAGR of Egypt’s MMF imports from the world has been around 3 per cent during the last five years. India is a leading supplier. Egypt has a GDP growth rate of 4.2 per cent in 2015 and continued investment is expected in Egypt’s large manufacturing export base. Turkey is one of the leading markets for Indian man-made fibre textiles. Domestic production of raw-materials and intermediaries like fibre, yarn and fabrics for the garmenting sector is understood to be inadequate, leading to substantial imports of textile material for export of fibres, yarn and fabric. Trade as a per cent of GDP in Turkey is around 58 per cent. In 2015, Turkey’s imports of T&C were around US$2.9 bln but showed negative growth. It would, therefore, be useful to focus on Turkey, as presently, India’s share hovers around only 2-3 per cent of the market. Over the years, India’s ties with Latin America have expanded beyond trade and investment to cooperation in areas such as energy, knowledge sharing as well as in multilateral grade for areas such as G-20, BRICS and IBSA (India, Brazil, South Africa). India enjoys a Preferential Trade Agreement with Mercosur and Chile. These arrangements throw up huge opportunities for the business communities in India and the LAC region. Mexico, Peru and Chile are important from the textiles trade point of view and Mexico and Chile are among the largest importers of textiles and garments respectively. Total import of apparel and home textiles (as per UN Com trade) of Mexico, Chile and Peru in 2015 was US$4. 1 bln, US$3. 1 bln and US$0.7 bln, respectively. It is understood that local industries in LAC countries have become less competitive and these countries are trying to reduce over dependence on China. However, India’s share of these markets was only 1 per cent and 4 per cent for apparel and home textiles in Chile; 3 per cent each for apparel and home textiles to Mexico and 2 per cent each for apparel and home textiles in Peru, indicating scope for substantial growth. Other Developed Markets: Oceania and Canada While focus in traditional markets (developed countries) would continue to be on exports of value-added products (apparel), Canada is a market where the share of commodity-type textiles has decreased, while the technical textile industry has experienced rapid expansion. Based on the latest data, technical textiles exports are projected to grow from $8.6 billion in 2015 to $9.3 billion by 2017. The technical textile industry is one where applications and technologies are constantly changing and therefore, exports tend to change as well. North America is the largest regional consumer of technical textiles due to the presence of the majority of end use industries. India can explore opportunities in export of technical textiles to Canada with which a Comprehensive Economic Partnership Agreement (CEPA) is being negotiated. Technical textiles are one of the fastest growing sectors within India’s textile industry. Currently, about 9 per cent of the world’s total consumption of technical textiles is estimated to be made in India. India’s market share in the technical textile sector is expected to grow from $11.6 billion in 2013 to $26 billion by 2017 as per ITA Technical Textiles Top markets Report, 2016. In Australia, textile, clothing and footwear (TCF) manufacturing industries are diverse and cover a range of different products including ready-for-use textiles, clothing, carpet, footwear and technical (non-aesthetic) textiles such as textiles for automotive applications. The Australia market size for apparel is projected to grow from US$ 25 bln to US$ 45 bln by 2025 at a CAGR of 5 per cent. India can build on opportunities in this market through the on-going CECA negotiations with Australia.  "