Indo-Lanka textile agreement inked

Secretary of the Indian Ministry of Textiles, Ms Zohra Chaterji said that China's textile market is gradually moving from production to consumption.

"Combining our strengths - Sri Lanka's garment manufacturing infrastructure and India's quality fabric output we could jointly compete for China's textile market," Chaterji said at the signing of an Memorandum of Understanding (MoU) on textile cooperation between India and Sri Lanka at the Galadari on Monday.

Economic Development Minister, Basil Rajapaksa, High Commissioner of India in Sri Lanka, Y.K. Sinha, Chief Executive Officer of Brandix Lanka, Ashroff Omar, Senior Minister M. Fowzie, Ms Zohra Chaterji, Secretary, Ministry of External Affairs, India, P S Raghavan, Chairman, Powerloom Development and Export Promotion Council of India (PDEXCIL), Visvanath Agarwal, Secretary, Ministry of Industry and Commerce, Anura Siriwardena, government officials and private sector representatives of both countries were present.

The Memorandum of Understanding on the new textile cooperation is the latest development in the aftermath of the Indian announcement in September 2012 that Sri Lanka can export eight million pieces of apparel at zero duty to India.

A 2011 survey by China National Garment Association (CNGA) showed the cost of Chinese textile and garment companies on labour, raw material, energy and financing were 'in the uptrend' and as such the Chinese textile market shows promise for foreign imports.

In its 2012 report, China Research and Intelligence Ltd estimated the Chinese textile market to be around $ 540 billionand combined annual exports of Chinese textiles and garments at $ 248 million. Forty percent of China's annual industrial output comes from textiles.

"This historic MoU will expand business and co-operation in the development of SME in handloom, powerloom and textile sectors. The Memorandum of Understanding will remain in force for five years from the date of signing the MoU and it can be renewed thereafter," said Secretary Siriwardene. "The key persons in the Joint Working Group (JWC) are the co-chairs, the Additional Secretary of the Ministry of Industry and Commerce and the Joint Secretary of the Ministry of Textiles of the Republic of India and members will collaborate with this MoU. We strongly believe in the involvement of the private sectors of both countries in taking this process forward," he said.

"There appears to be much more unrealised potential for Sri Lankan textiles to serve the Indian textile markets and we are confident that this delegation will understand and support us to further improve in this direction, Siriwardene said.

He thanked Indian Minister of Commerce and Industry, Anand Sharm for pioneering the MoU and for increasing the textile export quota from three to eight million pieces.

According to the Department of Commerce sources, total Indo-Lanka trade in 2012 stood at $ 4.086 billion. From January-June of 2013, exports from Sri Lanka to India stood at $ 279.17 million while imports from India totalled $ 1465.65 million, showing a declining trend in imports from India.

India's appetite for Sri Lanka apparels and textiles too has grown steadily. Last year, India was the eighth largest buyer of Sri Lanka textiles and garments valued at $ 64 million which was a three-fold increase from 2008.

Last year India was also the 10th largest buyer of Sri Lankan apparel valued at $ 39 million, a 44% increase from 2011.

"Sri Lanka Apparel has become one of the world's leading proponents of 'Ethical Business and Manufacturing Practices' for the global fashion and apparel sourcing business.

"In 2012, India also ranked the second largest buyer of Sri Lanka's woven fabrics category with purchases amounting to $ 20 million, a 42% growth from 2008," a spokesman for the Department of Commerce said.

Secretary, Indian Ministry of Textiles, Ms Chaterji said, "Textiles has immense promise for the mutual benefit of our countries. Sri Lanka is India's largest trade partner in South Asia.

"India is Sri Lanka's biggest trade partner. As 45% of Sri Lanka's exports are garments, it is opportune for both countries to jointly capture a larger global market share.

"The market opportunity is here and now it is for us to respond fast. Sri Lanka offers fast delivery and transit times and low transit costs. We can supply flexible quantities of your yarn requirements. There are also opportunities for joint investments," she said.