Amid SL economic crisis: Apparel orders diverted to India

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

Speaking to Asian News International (ANI), U.P. 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 crisis. Some orders have already been given to companies in the Tiruppur District of Tamil Nadu. Tiruppur is the hub of the textile industry in Tamil Nadu.”

Singh said last year’s textile sector export was around US$ 43 billion and this year the target is US$ 100 billion. He said India presently produces more than 340 lakh bales of cotton, but consumption is going to be more than production due to the order diversion from Sri Lanka due to the crisis.

The Textile Secretary pointed out that countries like Bangladesh and Vietnam have no import duties for importing cotton from Australia, Brazil, and South Africa.

“Conversely, our importers had to pay 11% 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 the European Union and the UK and our exporters were at a disadvantage,” Singh said.

“Our exporters have to pay 9.5% export duty which these countries do not have to pay. Now adding this 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 these countries. As we do not have to pay import duty on cotton, this will certainly make our exporters more competitive,” emphasised the Textile Secretary.

A. Sakthivel, President, Federation of Indian Exporters Organisation said, “Buyers are now starting to make queries with Tiruppur 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 into 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 citizens.

Sri Lanka’s economy has been in 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.

(ANI)