Textile stocks rally up to 10% as Bangladesh port curbs likely to generate Rs 1k cr biz for domestic firms
ADVERTISEMENT The shares of Siyaram Silk Mills rose the highest by 10% to an intraday high of Rs 797.35, followed by the shares of Faze Three, which surged by 6.8% to Rs 667. This was further followed by Vardhman Textiles and Redtape shares, which increased by 6% each in the intraday session.
Meanwhile, the shares of Kitex Garments and Raymonds hit their 5% upper circuit in intraday trade.
The surge in the stocks came after industry experts said that the curb may bring in more business for the domestic players, however, its should be noted that certain branded garments may also see some supply issues in the winter season, which could raise prices of items like t-shirts and denims by 2-3%.'We were importing garments worth Rs 6,000 crore annually from Bangladesh. We can now expect imports worth Rs 1,000-2,000 crore to be replaced with Indian manufacturing,' said Sanjay K Jain, chairman of National Textile Committee, Indian Chamber of Commerce (ICC), according to previous ET reports.
Also read: Defence stocks detonate in Rs 1.8 lakh crore boom. Is a ceasefire on the charts?
ADVERTISEMENT Indian firms have been sourcing woven and knitted apparel from Bangladesh, leveraging the zero-duty benefit.The Directorate General of Foreign Trade (DGFT) issued a notification on Saturday banning the import of garments and several other products from Bangladesh through land routes, while permitting shipments via Kolkata and Nhava Sheva ports.
ADVERTISEMENT Local industries had been pushing for such restrictions, raising concerns over the surge in textile imports from Bangladesh, driven by zero import duty.The move is also aimed at curbing the indirect import of Chinese fabric, which otherwise attracts a 20% import duty. Trade and industry stakeholders believe that Bangladesh stands to lose more than India due to the revised import policy.
ADVERTISEMENT In addition to this, the Free Trade Agreement (FTA) between India and the United Kingdom, finalised, is also poised to significantly boost India's textile exports to the UK, further enhancing the prospects of the industry.
'The agreement eliminates tariffs on 99% of Indian goods, including apparel and home textiles, removing the current 8-12% duty and placing Indian exporters on par with competitors like Bangladesh, Vietnam, and Pakistan. China leads UK textile imports (25% share), followed by Bangladesh (22%), Turkey (8%), and Pakistan (6.8%). The FTA will enhance India's competitiveness in this market,' noted a report by ICRA. 'India's apparel and home textiles trade with the UK is projected to double in the next 5-6 years, with export volumes expected to grow at a compounded annual rate of 13%,' the report added.
ADVERTISEMENT India's textile exports are anticipated to rise from 7-8% to 11-13% by CY2027, a growth which will be supported by incremental capacity additions in the garmenting segment, creating employment opportunities and improving earnings for exporters.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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