$12 billion apparel exports target may not be met: AEPC

The apparel exports target of $12 billion for the current fiscal may not be met as garment exports have been declining for the last three months in a row and may continue to follow the trend, the Apparel Export Promotion Council (AEPC) today said.

"In the first quarter, apparel exports were cumulatively down by 8 per cent. But we hope that we can cross last fiscal's figures of $10.72 billion," AEPC Chairman Premal Udani told reporters here today.

In the current fiscal, except for the month of April, garments exports saw a negative growth till July.

During April-July, exports declined by 8 per cent to $3.4 billion year-on-year.

The chairman said that given less demand from western markets like the US and Europe, the next quarter also does not look encouraging.

The APEC also asked the government to ensure that exports of cotton and yarn are calibrated and do not cause supply disruptions for producers of garments for export and domestic markets.

The prices of cotton/yarn have started sharply rising again due to the government's decision to allow exports from October 1 and the withdrawal of export duty on cotton, the council said.

Cotton prices have increased by 55 per cent between July, 2009, and August, 2010.

Udani said the cost of production was going up because raw material costs are climbing fast.

"Yarn mills have once again stopped deliveries and are planning to increase minimum Rs 10 per kg price for September delivery," he added.

Earlier, the government had announced that the Rs 2,500 per tonne export duty on cotton was being withdrawn and the Textiles Commissioner would start registration of mandatory cotton contracts from September 1.

Further, Udani said there were also labour law problems which did not give exporters the flexibility they need.

AEPC has also unveiled an Common Compliance Code aimed at identifying all legal requirements and standards, including forbidding child labour, forced labour, harassment or abuse, non-discrimination, health and safety and environmental requirements.

"It is the first-of-its-kind, industry-driven and industry-owned compliance project, which not only aims at developing an India-specific code of ethics, but also offers training and ways to build capacities," the chairman said.

To reduce the dependence on traditional markets like the US and Europe, apparel exporters are exploring new markets in Japan, West Asia, Africa and Australia.

The Textiles Ministry has set a $12 billion apparel export target for the current fiscal.