Textile firms turn to domestic market

Beaten by appreciating rupee the Indian textile industry is increasing prices and diversifying into high-margin specialized products to stay afloat in the competitive global market. The rupee has risen over 12% against the dollar since March. Exporters are now battling up to 50% un-utilized capacities as customers switch over to lower-cost alternatives. The inflexible labour laws are not helping either.

According to CII survey, revenues and profits of textile exporters have declined by about 9% due to rupee rise and could go down to 11% over the next six months. The Textiles Ministry has estimated a market size of $115 billion by 2012, with the export target fixed at $55 billion and the domestic market likely to grow to $60 billion. At present the market for the Indian textiles and apparel is about $52 billion, with exports amounting to $19.2 billion in 2006-07. If the 11th Plan export target of $60 billion is achieved by 2012, then India's market share in world textiles trade would grow from 3%to 8%.