After almost a year of negative growth, India’s textile and clothing industry’s exports to the U.S. grew by 8.26 percent in February this year, even as exports from China, the largest textile and clothing exporter to the U.S. (worth $32.3 billion or a third of US’ total T&C imports in 2007) slowed down registering a negative growth (-2.57%) in exports to the US in Jan-Feb 2008.

So what has led to this flux in the global T&C business?  it’s a repeat of history say analysts. In its evolution, the global textile industry has seen continual shifting of its base. As the economy grows beyond a level, it becomes unfit for the labour-intensive T&C sector. It happened earlier with Japan, and even earlier with the U.S. and EU .

Now, it’s China’s turn to cut its textile industry. And for other competitive textile producers like India, Vietnam and Indonesia, this is an opportunity. In India’s case, this is true for the next two decades at least (before it also finds textile production incompatible with the economy) reported The Economic Times.

Follwoing are the three reasons detailing why its China’s turn to cut its textile industy:

1. China’s raw material (read cotton) base is shrinking. China whose consumption of cotton is nearly three times India’s is importing 45 lakh bales from India.

2. Wages in China’s T&C industry are on the rise. Conventionally, Chinese wages were 30% higher than India’s, but now this disparity is widening, with China’s wages for unskilled and semi-skilled workers rising faster than India’s.

3. China’s is worse off than India now with yuan appreciating 8.52% against dollar in March 2007-March 2008, against rupee’s rise of 8.36% during the period. Althought a large part of fabrics produced in China are being converted into garments in Vietnam (which is therefore a major exporter to the US with exports of $4.6 billion in 2007), analysts believe these indirect exports of China would also decline in the coming months, leaving a larger part of the U.S. market for countries like India to capture.