India's cotton and apparel exports are set to climb by around 10 percent this year as higher wages, political instability and concerns about workplace conditions in other producing markets steer international buyers toward Indian exporters, industry officials said.

The rise in textile shipments from India - currently around 4.5 percent of world trade - may eat into top exporter China's 36 percent share of the market and will be a boon for Indian textile merchants keen to exploit rising demand stemming from weak cotton prices and global economic growth.

"My orders have increased by about 20 percent so far this financial year. It's a golden period for the Indian textiles industry," said Vijay Agarwal, chairman of Mumbai-based Creative Group, a leading apparel exporter.

Buoyed by fresh export orders, Agarwal is keen to expand his business by investing 2 billion rupees ($32.71 million) in the next year.

The main markets for Indian textiles at the moment are the United States and European Union.

Agarwal and other Indian exporters are anticipating a rise of roughly 5 percent in global demand for textiles and apparel this year.

In addition, India's textile exporters feel the relatively low labour costs in their country, alongside record domestic cotton production this year, should help them gain market share from other exporters in the region.

Cambodia looks set to lose some consumer demand after the government deployed troops in the capital earlier this month as garment workers held rallies to revive a campaign for higher wages that had helped stoke a year-long political crisis.

Textile manufacturers in Vietnam, meanwhile, have been hobbled by the high cost of credit and have struggled to finance expansion drives aimed at winning export market share.

And the collapse of a garment factory in Bangladesh last year continues to divert buyers to India and other markets because of enduring concerns over Bangladeshi workshop safety.

Aside from stronger global demand, larger domestic cotton supplies will also help India push textile and apparel exports up by about 10 percent in 2014/15, said Ajay Sardana, vice-president of Grasim, part of the Aditya Birla conglomerate, on the sidelines of a recent conference in Mumbai.

India will be the world's No. 1 cotton grower this year, ousting China from the top spot for the first time in over 30 years, the U.S. government forecast on Sept. 12.

The Cotton Association of India has pegged next year's output at 39.63 million bales, but experts believe production could be as high as 41 million bales as the area under cultivation has gone up this year.

Expansion in domestic demand is also likely, with India's local textiles market expected to grow to $65-$68 billion in coming years from the current $60 billion, Sardana added.

And unlike in some markets such as China and Cambodia, labour remains cheap in India, keeping costs competitive, said D. K. Nair, secretary general of the Confederation of Indian Textile Industry.

But while exports are expected to rise from India, China, with textiles and apparel exports worth $270 billion, around seven times that of India's receipts, is expected to remain the dominant player.

India's relatively poor infrastructure, wobbly energy supplies and lack of a business-friendly environment for both foreign and domestic investors are expected to constrain overall export growth over the near to medium term, said Christian Schindler, director general of the International Textile Manufacturers Federation

Source:- business-standard.com