Apparel exporters wary of achieving US$18 bn target

Going by the April-May export orders from the US and Europe, apparel exporters in India are wary of achieving the $18 billion apparel exports target this year. While the US and European markets have been disappointing for apparel exports, the industry in India has not been able to shift enough efforts to newer markets.

Apparently, in last two months, apparel exports from the two major western markets have declined by 30 per cent in volumes.

"Rupee depreciation may have painted a rosy picture in terms of value, volumes have been witnessing negative growth from the US and Europe for Indian apparel exporters. In such a short time, Indian exporters have not been able to shift their focus immediately to newer markets. Thereby, it seems difficult to achieve apparel export targets this year," said DK Nair, secretary general, Confederation of Indian Textile Industry (CITI).

Both US and Europe jointly contribute to about 70 per cent of India's total apparel exports which was around $ 14 billion in 2011-12.

"Government has given apparel exporters a target of $ 18 billion. However, it seems very unlikely to be achieved considering the decline in volumes from the western markets. We will only get a clearer picture in August when we might receive orders for next year," said Premal Udani, CMD of Mumbai-based Kaytee Corporation Pvt. Ltd.

For Bangalore-based Mahalakshmi INC, which used to export mostly to the US and Europe says that orders are down from the west by 40,000-50,000 pieces per month. "While we used to export about 150,000 pieces per month to US and Europe, we are now doing only 90,000-100,000 pieces per month. The impact is higher for firms like us who have huge dependency on west for export orders," said Gautam Jain of Mahalakshmi INC.

This despite apparel exporters looking to reduce dependency on the two western markets since sometime.

"It has been a long term plan to reduce export dependency on US and Europe. However, in last few months the industry has not been able shift business to newer markets in such a short time. The only respite is the rupee depreciation which has reduced the decline of apparel exports in terms of value," said Rahul Mehta president of Clothing and Manufacturers' Association (CMAI).