Last year it was rupee appreciation, now it is the global financial crisis. Textiles minister Shankersinh Vaghela on Wednesday admitted that it was next to impossible now for the country to achieve the target of $ 50 billion in textile exports.
"Overall imports in US and Europe have gone down and that has impacted us as well," Vaghela said. "Last year, a strong rupee led to us missing our export target while this year we are grappling with overall financial crisis. It is looking difficult for us to achieve the $ 50 bilion target."
He, however added that there is no revision of the target just yet even as the industry said its lower target of $ 40 billion may also not be realised.
"The situation is particularly bad right now as the imports in US and EU are shrinking and there is very little that can be done," said D K Nair, Secretary General, Confederation of Indian Textile Industries. "It is unlikely we will achieve even the $ 40 bn export target."
Some of the exporters are however positive that India may gain at the expense of China due to the existing currency situation.
"There is always an impact of a recession in developed markets and in general the business is less, " said Sudhir Dhingra, managing director, Orientcraft Ltd. "But we are being helped by a weak rupee which opens up newer opporutnities."
Textiles could face problems on every front. Apart from currency volatility that could erode margins, the industry is also one of the most cut-throat, with neighbours like Pakistan and Bangladesh among key competitors.
An emerging demand crunch in the historically lucrative US and Europe markets, where consumers are tightening their belts, would make exports even tougher.