|
| B'desh ahead in apparel export |
| Devika Banerji / New Delhi Dec 28, 2009, 00:07 IST |
|
Bangladesh has overtaken India in apparel exports this year. For the first nine months, its exports stood at $2.66 billion, ahead of India’s $2.27 billion.
In 2008, both the countries were at the same level ($10.9 billion) with each having 3 per cent share of global apparel exports.
India’s exports volume is down 80 per cent this year for two reasons: One, the global economic downturn and increasing competition from Bangladesh, Vietnam and Sri Lanka. During the downturn, buyers looked for cheaper deals and Indian exporters were unable to compete on costs due to rising raw material and power costs. The second reason: Many domestic companies are setting up units and offices in Bangladesh to avail the benefits of duty-free access. Prominent among those who have set up units in that country are House of Pearl Fashions (two units) and Raymond (one unit).
Sudhir Dhingra, managing director of Orient Craft Exports, said, “Bangladesh has a cost edge of 9-29 per cent across various products. The country has duty-free access to European markets and labour is cheap. It is more profitable to export from Bangladesh, than from India.”
Deepak Seth, chairman of the House of Pearl Fashions, said the company’s units in Bangladesh had been operating “efficiently and profitably”. The company would double its capacities for T-shirts and woven tops/bottoms in Dhaka in the next financial year.Seth said labour costs in Bangladesh were 50 per cent of that in India and there was no duty on imports to EU, Australia and Canada. “The Bangladesh government’s huge priority to the sector is another big draw.” House of Pearls has units in Indonesia and Vietnam as well.
Orient Craft was planning a unit in Bangladesh a year ago but dropped the idea due to changed focus of business. “There are no difficulties in setting up a unit in Bangladesh and we considered setting up a base there. However, we are focusing more on domestic markets now,” said Dhingra.
Analysts and textile experts said it was not common for Indian companies to set up units in Bangladesh. “There are distinct advantages of setting up units in Bangladesh but only a few big players have done it. Smaller players will not venture into setting up units in other countries,” said Prakash Agarwal, vice president of consulting firm Technopak.
D K Nair, secretary general of Confederation of Indian Textile Industry (CITI), said some of the Indian companies had set up garment manufacturing units in Bangladesh, but it didn’t mean much.
Medium and small exporters have not yet warmed up to the idea of setting up offshore units. “It is difficult for smaller units to understand, invest and operate in a foreign location. The Indian players who have set up units there have not actually relocated. They still have units in India and, therefore, are not necessarily our competitors,” said Praveen Nayyar, managing director of Delhi-based Dimple Creations Private Ltd.
The problem, Indian exporters said, was elsewhere. With fabric prices shooting up by 51 per cent in recent months, along with speculative activities in the cotton market, woes of exporters have multiplied.
“We are not able to take re-orders as our costs have multiplied due to steep rise of raw material costs. We are not able to maintain our margins and are rendered uncompetitive. Orders once lost are not going to come back,” Nayyar added.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
