October 21, 2015 CHENNAI: India's bilateral trade with its northern neighbour China is skewed in terms of having more imports than exports. India's exporters body Federation of Indian Export Organisation red flagged the devaluation of the Chinese Renminbi, forecasting an expansion of the deficit in bilateral trade with China towards $50 billion. It said there has been a 17.6% overall decline in exports from India, making it more improbable to achieve the number of previous fiscal 2014-15.For Indian entrepreneurs, China appears to have unfurled a currency expressway into the global exports market, leveraging their giant capacities and light currency.The immediate task at hand for Indian players is to hold their ground in the trade scene with China. Rate negotiations in commodities such as cotton yarn takes place in trade fairs, a recent one such in China showed Tamil Nadu's textile players the intensity of this imbalance. "The yarn exhibition in China recently told us what the situation is. There was immense pressure on pricing. Indian manufacturers struggled to get a good rate for their yarn. We realised we need a local presence," said Prabhu Damodharan, Secretary of Indian Textile Federation.
The idea of a common office in China has been mooted in a letter southern entrepreneurs have sent to the textile ministry. Sent on Monday, the letter suggested that direct selling offices in China, with the industry funding the expenses and the ministry facilitating the setting up.
In India, textiles initially appeared to buck the slowing trend in exports but it has now been dragged into the decline - ready-made garment exports in April had crossed Rs 10,000 crore but a gradual but steady decline through the April-September period bought down the number to Rs 7,545 crore. The Tirupur exporters Association alone has set a target exceeding of Rs 36,000 crore for the year 2016-17.
"In terms of the greenback, the growth is only 2.32%, which is worrying. It is mainly due to demand compression in the West," said a top official from the Tirupur Exporters Association.