Export Merchandising and

EXIM Documentation

Report on Product Costing and Export

Submitted To:
Dr. Santosh Tarai
Associate Professor, FMS, NIFT Bhubaneswar

Submitted By:
Pragati Joshi
Sreshtha Chaudhury
Yashi Srivastava
Department of Fashion Management Studies
Semester - II, Batch 2021-2023
NIFT Bhubaneswar

Date of submission: 25/05/2022

INDIA'S TOP 5 EXPORTING DESTINATION
The Indian textile industry contributes to 7% of the industry output
(in value terms) and around 15% to the India’s export earnings. The
trade of Textile and Clothing had a share of 5.38% in India’s total
trade during 2019-20.
Although, India’s textile trade has been constantly increasing since
2016-17, a slight decline in trade was witnessed during 2019-20. The
total textile trade in 2019-20 stood at USD 42.36 billion compared to
USD 44.89 billion in 2018-19. The export of Textiles stood at USD
34.21 billion. The exports of textiles declined at a rate of (-) 8.74%
while imports of textiles registered a growth of 10.33% during 2019-
2020. The share of Textiles and apparel in overall export basket of
India was 11.34% during 2019-20.
 Garments exported by india

The Indian textiles and apparel are globally acclaimed for their
exceptional craftsmanship and exquisite quality. Cotton, silk
garments, and denim produced in India are highly prevalent in the
international market. The primary export destination of the Indian
garment industry is the USA and the European Union. Asian
countries and the Middle East. The export of garments is expected to
touch $82 billion by 2022, providing 12% of the GDP (Moitra, 2021).

The textiles and apparel industry in India has strengths across the
entire value chain from fibre, yarn, and fabric to apparel. The Indian
textile and apparel industry is highly diversified with a wide range of
segments ranging from products of traditional handloom,
handicrafts, wool, and silk products to the organized textile industry
in India. The organized textile industry in India is characterized by
the use of capital-intensive technology for the mass production of
textile products and includes spinning, weaving, processing, and
apparel manufacturing.

The domestic textiles and apparel industry stood at $108.5 bn in

2019-20 of which $75 bn was domestically consumed while the
remaining portion worth $28.4 bn was exported to the world market.
The highest contributors to FDI in the Textile sector of India
(including dyed, and printed) from April 2016 to March 2021 are
Japan, Mauritius, Italy, and Belgium.
Cotton production supports 5.8 million farmers and 40-50 million
people in allied sectors.

Further, the domestic consumption of $75 bn was divided into

apparel at $55 bn, technical textiles at $15 bn and home furnishings
at $5 bn. While exports comprised apparel exports at $12 bn; home
textiles exports at $4.8 bn; fabric exports at $4 bn; yarn exports at
$3.8 bn; fibre exports at $1.8 bn and others at $2 bn.

Export of Cotton Yarn/Fabrics/Made-ups, Handloom Products Etc.

was valued at $1297.82 bn in August 2021 with a positive growth of
55.62% over exports of $833.95 bn in August 2020.
Export of RMG Of All Textiles was valued at $1235.11 bn in August
2021 with a positive growth of 13.99% over exports of $1083.53 bn in
August 2020.

The export of Textiles & Apparel from April - December 2021 is $

30449.85 mn, posting an increase of 52% over the same period
during 2020.

A total of 1,77,825 Weavers and Artisans are registered on

Government-e-Marketplace (GeM).

Cotton, silk, and denim from India are highly popular abroad, and
with the upsurge in Indian design talent, Indian apparel has found
success across fashion centres around the world.

Knitted apparel is the top commodity and exports totalled US$

6,135.81 million. Under this category:-

Men’s T-shirt was witnessing strong growth in the export market,

but due to the global Covid-19 pandemic, the demand dipped
from major markets. Knitted T-shirt exports totalled US$ 1920.02
million in 2020. Under this segment, the cotton T-shirt was
exported the most, with an export value of US$ 1444.65 million.
 Knitted cotton babies garment was the second highest exported
product in the apparel exports. Exports of this product was
valued at US$ 626.05 million. Knitted babies garments made of
synthetic fibre was estimated to be US$ 24.41 million.

Woven apparel exports totalled US$ 6,132.44 million in 2020, where:-

Other dresses made from synthetic fibre were exported the most
to the world from India. Exports of this product totalled to US$
483.71 million.
Surprisingly, even as MMF is the preferred fibre in global markets,
India’s exports of weaved other cotton dresses recorded a value of
US$ 296.23 million.
Woven men’s shirts made of cotton witnessed an export value of
US$ 171.78 million in 2020.

Apart from these, another category of garments known as Used

Clothing is also exported by India, where:-

The value of Used Clothing exported from India in October 2020

was 4.91 USD million.
Major countries where Used Clothing was exported in October
2020 are the USA (1.88M), Germany (0.45M), France (0.37M),
Canada (0.23M) and Vietnam (0.21M).

The top-10 Chinese products exported to the US where India also has
a presence are:-

Jerseys
Pullovers
Cardigans
Waistcoats made of cotton/ man-made fibres (MMF)
Trousers
Shorts made of cotton/ synthetic fibres
Hosiery
Singlet
Tracksuits
Talking of the Indian garment industry, the first name to pop up is
Raymonds. It commands 60% of the Indian garment market. The
company is known to manufacture around 2000 designs of garments
befitting for various occasions and is known to export its products to
55 countries worldwide. The leading export destinations of the brand
are the USA, Canada, Europe, Japan, and the Middle East. Raymonds
is ranked amongst the first three fully integrated garment
manufacturers and exporters of India. It exports these products:-
Shirts
Jeans
Trousers
Suits
Jackets
major export markets of india

Source: textileexcellence.com

Among the top 20 export markets, only exports to Bangladesh and

Vietnam witnessed a rise, both have climbed few positions up on the
list. The rest of the top 18 markets registered a drop in the T&C
exports in 2020.

Country-wise, USA remains the largest export market for India’s

textile and clothing goods. USA stakes a share of 25% of the total
T&C exports of India. India’s apparel exports to USA totalled to
US$ 3,299.25 million in 2020.

Bangladesh is the first country on the list to witness a positive

growth and is now the second largest export market for India’s
T&C goods. Bangladesh staked a 7% share of the total T&C exports
of India in 2020 and export value totalled to US$ 2092.81 million.
However, India mainly exports low value commodity inputs to
Bangladesh. Cotton is the largest exported commodity to
Bangladesh and is the only commodity to witness a positive trend
among others.

UAE stood as the third largest market for India’s T&C goods. India
exports sizeable quantity of knitted apparels to UAE, in 2020, the
exports of knitted apparels was US$ 891.05 million and exports of
woven apparel to the UAE was US$ 626.02 million.

UK was the fourth largest market for Indian T&C goods,

accounting for 5% of India’s total T&C exports. India mainly
exports finished apparel to the UK market. In 2020, apparel
exports was valued at US$ 1127.95 million.

China accounts for a share of 4 % of India’s total T&C exports.

Exports to China was at US$ 1319.56 million in 2020. Cotton is the
major commodity exported to China.

Vietnam is the second country in the top 20 that has perceived a

positive growth. Exports to Vietnam rose by 18.2% to US$ 402.53
million in 2020. Here too, India supplies more of cotton fibre.
indian apparel export trends

In the high-margin global export market for clothing and

apparel, India has been edged out by competitors such as
Vietnam, Indonesia and Bangladesh consistently over the last 10
years, which have been growing much faster in supplies to key
markets such as the US and the EU.

Officials at the Ministry of Commerce and Industry have

maintained that duty remission schemes such as RoDTEP
(Remission of Duties and Taxes on Exported Products) and
RoSCTL (Rebate of State and Central Taxes and Levies) have
helped free the financial headroom available for exporters.

India’s apparel exports comprise mainly of cotton garments,

around 51%, with manmade fibre accounting for around 28%. If
India can diversify its fibre base, as global consumption is
diversified and MMF (man-made fibre) holds a much larger
share as compared to cotton, it will be fruitful.

That apart, competition on pricing has also increased in recent

times. India is projected to lose market share to Bangladesh and
Vietnam for ready-made garment exports to the European
Union (EU), because of lower competitiveness, as Bangladesh has
duty-free access to the EU.

However, apparel manufacturers are now focusing on

diversifying exports into countries such as Japan, Israel, South
Africa and Hong Kong.
 IMPACT OF COVID-19

The textile industry supply chains, trade logistics and developing

countries

Supply chain disruption: the reduced demand perspective

Supply chain disruption: the reduced production perspective
Transport connectivity impact
In April 2020, the World Trade Organization (WTO) published a
trade forecast which predicted a contraction in world merchandise
trade of between 13% and 32% in 2020, based on modelling for
optimistic and pessimistic scenarios.

The fallouts of the pandemic COVID-19 have an unprecedented

impact on the global economy and very badly impacted the price
level of apparel items to the US markets, the world’s largest garment
importing nation. The apparel exporting countries to the USA like
Bangladesh, China, India, Egypt and Pakistan have been facing a stiff
price war to the American markets in the time of the pandemic.
The supplying countries have been witnessing a drastic price fall in
the US markets and also a drop in the import of goods due to slower
demand by the consumers.
Buyers are following now a “go slow” approach and placing their
orders in small slots instead of bulk amount.

After the third quarter of the fiscal year 2020-21, the export earnings
from RMG stood at $23.49 billion which was $25.95 billion during the
same period of FY2018-19, indicating a 9.49 percent decline
equivalent to a short of $2.46 billion.

Knitwear export struggled to retain 0.35 percent growth in March

2021 over March 2019; the average growth of knitwear export for
July-March 2020-21 than July-March 2018-19 is -1.15 percent.

Woven garments is facing the toughest time ever, while export has
suffered double-digit decline since August 2020, and in March 2021
compared to March 2019 woven export fell by 27.70 percent.

The price trend continues to worsen as March 2021 posts a 5.11

percent decline in unit price compared to March 2019

Owing to the recovery of global demand coupled with revival in

domestic activity, India’s merchandise exports and imports
rebounded strongly and surpassed pre-COVID levels during the
current financial year. The revival in exports was also helped by
timely initiatives taken by Government. USA followed by UAE and
China remained the top export destinations in April-November, 2021
Major Schemes & Initiatives to boost exports
Remission of Duties and Taxes on Exported Products (RoDTEP): In
order to boost Indian exports, a WTO compliant RoDTEP scheme is
brought into effect from 01.01.2021. Based on the globally accepted
principle that taxes and duties should not be exported, this scheme is
an improvement over Merchandise Exports from India Scheme
(MEIS).

Developing District as Export Hub: Under this initiative, the focus is

to make districts active stakeholders in the promotion of exports of
goods/services produced/ manufactured in the district. District Export
Promotion Committees (DEPCs) have been set up in each district.
Products with export potential (including agricultural, geographical
indication (GI) & toy clusters) have been identified in all 739 districts
across the country. This scheme would help in diversifying the
portfolio of export commodities.

Production-Linked Incentive (PLI) scheme: An outlay of `1.97 lakh

crore (US$ 26 billion) was announced in Union Budget 2021-22 for
Production-Linked Incentive (PLI) External Sector 93 scheme for 14
key sectors starting from 2021-22. The scheme provides incentives to
companies on incremental sales for products manufactured in
domestic units, which is expected to create minimum production of
over US$ 500 billion in 5 years.

Electronic Platform for Preferential Certificate of Origin (CoO): In

view of the COVID-19 crisis, on-boarding of FTAs/ preferential trade
agreements (PTAs) was quickly done to allow electronic issuance to
avoid physical movement. Around 4.6 lakh CoOs have been issued
from the e-platform till date

Infusion of capital in EXIM Bank: Government of India infused

capital of `750 crore in Export-Import Bank of India (EXIM Bank)
during the current financial year 2021-22 through subscription to its
share capital.
 references

Moitra, M. (2021, July 27). Top 4 Garment Exporters In India 2022.

https://blog.exportsconnect.com/the-garment-exporters-in-india/

Dsouza, H. (2021, June 21). India’s Textile And Clothing Exports Fell 16.3% In 2020.
https://www.textileexcellence.com/featured/indias-textile-and-clothing-exports-
fell-16-3-in-2020/

n.a. (2020, February 20). Top 10 products that can boost India's apparel exports: AEPC
compiles list.
https://www.business-standard.com/article/companies/top-10-products-that-
can-boost-india-s-apparel-exports-aepc-compiles-list-120022001551_1.html

Sasi, A. (2021, Sptember 5). Textile, apparel orders, especially from US, power India
export surge.
https://indianexpress.com/article/india/textile-apparel-orders-especially-from-
us-power-india-export-surge-7487842/

Parashar, P. (2019, April 23). Why India’s apparel exports are falling.
https://www.livemint.com/market/mark-to-market/why-india-s-apparel-
exports-are-falling-1555958315769.html

n.a. (2021, December 15). What Ails India’s Apparel Exports?

https://www.rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=20692