Officials from the Ministry of Textiles of Sri Lanka stated in April 2022 that as Sri Lanka experiences the most serious economic crisis, textile export customers have gradually shifted orders to India.
UP Singh, Secretary of the Ministry of Textiles of India, said: Because Sri Lanka is in the most severe economic crisis, countries that originally imported textiles from Sri Lanka have transferred some orders to India. The company is based in Tirupur district of Tamil Nadu, which is the centerpiece of the textile industry in the state.
Singh pointed out that India’s textile industry exports will be approximately US$43 billion in 2021, and the 2022 target is set at US$100 billion. India currently produces more than 34 million bales of cotton, but consumption is expected to exceed production as Sri Lanka’s economic crisis shifts orders.
It also stated that Bangladesh, Vietnam and other countries do not impose import tariffs on cotton imported from Australia, Brazil, and South Africa. However, Indian importers have to pay an 11% tariff, which makes input costs too high and uncompetitive. Therefore, importers ask the government to cancel import tariffs. Vietnam, Bangladesh, Sri Lanka, and Pakistan have gained advantages in some markets, such as the European Union and the United Kingdom, but Indian exporters are at a disadvantage.
He emphasized: my country’s exporters must pay 9.5% export tariffs, but these countries do not. The 11% import tariff and 9.5% cotton export tariff make it difficult for my country’s textile exporters to compete with these countries. Now that cotton import tariffs are no longer levied, it will definitely make our exporters more competitive.
A Sakthivel, Chairman of the Federation of Indian Exporters (FIEO) said: Due to the poor situation in Sri Lanka, buyers have now started to contact the Exporters Association of Tirupur District We will consult with other units in India and some of them may turn into orders. This is an opportunity. Everything is on track and we expect some orders to move from Sri Lanka to India.
He added that Indian exporters are receiving inquiries from customers in the UK, EU and other countries. The main inquiry products are: woven products, shirts, T-shirts, some baby clothes, etc. We hope that these can become orders. Sri Lanka is facing its worst economic crisis since independence, with food and fuel shortages, soaring prices and power outages affecting the country’s people.
Since the outbreak of the new crown epidemic, Sri Lanka’s economy has been in recession, resulting in a sluggish tourism industry.
The country is also facing a shortage of foreign exchange, which affects its food and fuel imports. The shortage of necessities also forces Sri Lanka to seek assistance from friendly countries.
