The country's total exports may be rising at around 20 percent but overseas sales of textile, apparel and handicrafts have declined during the first five months of this financial year, according to Reserve Bank data.

"Exports of textile and textile products and handicrafts continued to register declining trend," RBI said in a study on India's foreign trade 2007-08.

There was a three per cent decline in apparel and 16 percent fall in silk textile export in dollar terms, it said.

Export of textile and products declined due to reduced off-take by major markets such as the US, the UK and Italy.

The country's exports to the US in April-October declined to 3.2 percent in value terms as compared to 6.8 percent in the corresponding period last year, while in quantity terms the exports recorded a 1.9 percent growth, according to the US Department of Commerce, Office of Textiles and Apparel.

The Prime Minister's Economic Advisory has also pointed out that "absolute declines in cotton yarn, fabric and made-ups, apparel, natural silk textiles and handmade carpets. The decline in the value of exports of such items when measured in India rupee is obviously larger".

The rupee has risen more than 15 percent in the past year-and-a-half due to huge capital inflows. The appreciation has hit exporters hard, forcing the government to announce packages amounting to around Rs 5,200 crore.

The Council had favoured another package for labour intensive sectors such as textiles.

"The impact of the appreciation of the Indian rupee vis-a-vis the dollar and other major currencies has been a major source of concern," the Council had said in its economic review.

Mr. Divya Aggarwal

Money Management Consultants Ltd

Senior Copy Editor, Money Management Consultants Ltd
New Delhi, India

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