Tuesday, June 18, 2024

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Amid Sri Lankan economic crisis, apparel orders from island nation diverting to India

Countries importing textile products from Sri Lanka have now started moving towards Indian exporters as Sri Lanka continues to reel under its worst economic crisis, said the Ministry of Textile official on Friday.

Speaking to ANI, UP Singh, Secretary, Ministry of Textile said, “Some countries who were earlier importing from Sri Lanka, have started contacting India, as Sri Lanka is under its worst economic crises. Some orders have already been given to companies in the Tirupur district of Tamil Nadu. Tirupur is the hub of the textile industry in Tamil Nadu.”

Singh said that last year’s textile sector export was around USD 43 billion and this year the target has been set for 100 billion. He said India currently produces more than 340 lakh bells of cotton, but consumption is going to be more than production due to the order diversion from Sri Lanka due to the crisis.

“Conversely, our importers had to pay 11 per cent duty leading to high input cost which makes them uncompetitive. So our importers were demanding the government to lift the import duty. Vietnam, Bangladesh, Sri Lanka and Pakistan were getting the advantage in certain markets like European Union and the UK and our exporters were at disadvantage,” Singh said.

“Our exporters have to pay 9.5 per cent export duty which these countries do not have to pay. Now adding these 11 per cent import duty and 9.5 per cent export duty on cotton, it becomes very difficult for our textile exporters to compete with such countries. Since now we do not have to pay import duty on cotton, this will certainly make our exporters more competitive,” emphasized the Textile Secretary.

A Sakthivel, President, Federation of Indian Exporters Organisation said, “Buyers are now started making queries with Tirupur Exporters Association and other places in India because the situation in Sri Lanka is bad. Some queries may turn into orders. This is an opportunity. Good talks are happening and we expect some orders to divert from Sri Lanka to India.”

He said Indian exporters are getting queries from countries like the United Kingdom and European Union Countries. “Their queries are mainly for woven items, shirts, t-shirts and some baby garments. We are hopeful that these queries will turn in orders,” Sakthivel hoped.

Sri Lanka is facing its worst economic crisis since independence with food and fuel shortages, soaring prices and power cuts affecting a large number of the people in the island nation.

Sri Lanka’s economy has been in a free-fall since the onset of the COVID-19 pandemic, leading to the crash of the tourism sector.

Sri Lanka is also facing a foreign exchange shortage, which has affected its capacity to import food and fuel. The shortage of essential goods forced Sri Lanka to seek assistance from friendly countries.

Economic Times

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