NEW DELHI, APRIL 22: Having missed the textile export target for fiscal 2007-08, the Ministry of Textiles is considering lowering its ambitious 2010 target of $50 billion by almost 40 per cent. The proposed revision comes barely three years after the phase out of quotas in 2006 and proves once and for all that the country could not quite capitalise on the potential in the global textile and apparel landscape.

According to a ministry official, steep rupee appreciation that had haunted the industry throughout last year has robbed exports of the momentum that it had acquired over the years. “The rupee appreciation could not have happened at a more inopportune moment. Just as we were standing up to the Chinese onslaught it robbed us of the momentum,” the official said. “The $50 billion target was set keeping in mind the positive double digit growth that we were clocking but now with a year gone, $30 billion seems to be a more realistic target.”

Textiles minister Shankarsinh Vaghela also admitted that the last fiscal (2007-08) was bad for the industry but was hopeful that better times are in the offing. “We had set a target of $25 billion, but at the end of it we are short at $20.5 billion. Rupee appreciation is to be squarely blamed for this as it hit our margins, while competing countries like Bangladesh and Pakistan benefited from it,” Vaghela said. “The last quarter however, was good for us and we managed to grow by 10 per cent in the fiscal — something that had looked unachievable a few months back.”

The industry — that had set a more modest target of $ 40 billion for 2010 — is in consonance with the ministry on this. “It is true this was not the best year for us and $50 billion is simply not possible. But I believe the growth story remains as in the last few months the Chinese yuan has appreciated more than the Indian rupee while we have managed to grow even as others have slid,” said Confederation of Indian Textile Industry secretary general D K Nair. “Also we have managed to hold on to our employment level and there have been no actual job losses. Though the sector will not be able to realise the employment potential that we were talking about, we can be sure that jobs will not be lost in the current fiscal as well.”

In the US, which is the biggest market for textile exports with 25 per cent of the pie, India’s exports grew faster than overall US imports in 2007 and the trend continued in first two months this year as well. But unlike last year, the unit value realisation of Indian exports to US have improved this year indicating that profitability may also be returning to the industry. The sector with a turnover provides direct employment to 40 million people while contributing 4 per cent to the GDP and 15 per cent to the country’s export earnings.