Textile orders from Sri Lanka diverting to India amid economic crisis
- Countries that were importing textiles from Sri Lanka are contacting India
- Garments and tea are the major exports from Sri Lanka
- Sri Lanka exports $5.42 billion worth of garments to the global markets
Countries importing textile products from Sri Lanka have now started looking toward Indian exporters as Sri Lanka continues to face one of its worst economic crises. Tea estates of southern India and Assam are also witnessing a hike in overseas orders as the export demand has shifted to India from Sri Lanka. Garments and tea are the major exports from Sri Lanka. According to an Economic Times report, Sri Lanka exports $5.42 billion worth of garments to the global markets annually.
Countries that were earlier importing from Sri Lanka are contacting India as Sri Lanka is under its worst economic crisis. 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, UP Singh, Secretary at the Ministry of Textile, told ANI.
Singh stated that last financial year’s textile exports were nearly USD 43 billion and the current year's target has been set for 100 billion. Currently, India 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 economic crisis.
Textile Secretary added that countries like Bangladesh and Vietnam have no import duties for importing cotton from Australia, Brazil and South Africa. On the other hand, Indian investors had to pay 11% import duty leading to high input costs which makes them uncompetitive. So importers were seeking import duty exemption from the government. Vietnam, Bangladesh, Sri Lanka and Pakistan were gaining the advantage in European markets while Indian exporters suffered.
"Our exporters have to pay 9.5% export duty which these countries do not have to pay. Now adding these 11% import duty and 9.5% 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.
Talking to ANI, A Sakthivel, President, Federation of Indian Exporters Organization said buyers have now started making queries with Tirupur Exporters Association and other sources in India as the situation in Sri Lanka is critical. This is an opportunity because good discussions are happening and some orders are expected to divert from Sri Lanka to India.
Indian exporters are receiving queries for woven items, shirts, t-shirts and some baby garments from countries like the United Kingdom and European Union countries.
Sri Lanka is reeling under its worst economic crisis since independence with food and fuel crunches, rising prices and power cuts affecting a large population in the island country.
Sri Lanka’s economy has been struggling since the beginning of the COVID-19 pandemic, leading to the crash of the tourism industry.
The country is also facing a foreign exchange shortage, which has affected its capacity to import food and fuel. The shortage of essential products forced the Sri Lankan government to seek support from friendly countries.