Cheaper rupee & Bangladesh's troubles cheer India's apparel exporters

Exporters have shifted their focus to non-traditional markets like South America, Japan, New Zealand to increase exports

Apparel export of $17 billion is expected this financial year, compared to $14 bn last year, say those in the trade.

A cheaper rupee will help. Exporters are hoping to capture buyers who used to source apparel from Bangladesh. The latter, currently the second largest apparel exporter in the world, has seen several negative happenings which have highlighted the poor working conditions of labour in the segment. These have led to several foreign brands which had outsourced garment making there to try and move away. Indian exporters are trying to attract those foreign retailers to shift their sourcing to India.

“I think this year we will be able to achieve apparel export worth $17 bn,” said Rahul Mehta, president of The Clothing Manufacturers Association of India (CMAI). He said this while addressing a media conference about the National Garment Fair, beginning here from July 1.

Mehta’s optimism is reflected in the data for April and May, the first two months of the 2013-14 financial year. Total apparel export was $2.3 bn, compared to $2 bn in the corresponding period last year.

Exporters have shifted focus to non-traditional markets such as South America, Japan and New Zealand and this ought to help achieve a higher target. Also, China is moving away from labour-intensive industries, expanding the opportunity for Indian apparel export.

In the home market, it is growth in tier-II and tier-III cities which will drive the industry’s expansion, as trends change and people get more fashion-conscious, raising their dependence on readymade apparel.

The growth rate of branded apparel was zero in the past two years, due to the 10 per cent excise duty on the sector. This has been removed and the industry is expected to grow six to seven per cent this year and 10-12 per cent next year. The women’s segment is seen as having rapid growth potential.

“With input costs being on a rise, the depreciation in the rupee will help exporters, as our margins will go up by four to five per cent,” said Premal Udani, chairman of the board of trustees of CMAI.