War, slowdown prompt Tiruppur exporters to explore alternate markets

Move follows 21% YoY dip in exports in October; some exporters believe things will improve in the coming months as yarn prices have declined and dollar rates are favourable

With demand coming down from the United States due to the economic slowdown, and in Europe due to the Ukraine war, exporters from India’s largest garment hub Tiruppur are looking to diversify their export baskets to countries like UAE, Australia and Japan. This is after the exports from Tiruppur dipped 21 per cent year on year in October.

The plan to diversify the basket is coming at a time when the global situation is threatening to affect the annual sales numbers of the garment hub. However, some exporters believe that things will be much better during the coming months as yarn prices have declined and dollar rates are favourable for exporters.

“We are looking at countries like the UAE, with whom we have a free trade agreement. We are also looking at Australia, Japan,” said K M Subramanian, president, Tiruppur Exporters’ Association (TEA). According to a report by the Confederation of Indian Textile Industry (CITI), India’s textile exports dipped 17 per cent during April-September of the current fiscal year to $10.05 billion, from $12.11 billion during the same period in 2021-22.

Overall textile and apparel segment exports declined by 6.3 per cent to $18.22 billion during the period under review. In September, textile and apparels saw a 27 per cent decline in exports. According to another industry study, items like man-made yarn, fabrics and made ups saw a dip of 25 per cent in October, while readymade garment exports were down 21 per cent. Despite this, the region has so far posted total exports of Rs 22,000 crore, as compared to Rs 33,525 crore during the entire financial year 2021-22, Subramanian added. “We expect the orders to go up as yarn prices have reduced by over 40 per cent and the dollar is on favourable turf,” he added.

“We are not seeing any major rise in exports because of the war situation in Europe and the US economic situation. Orders are down too compared to the same time last financial year,” said M P Muthurathinam, president, Tiruppur Exporters and Manufacturer Association  (TEAMA). During the last financial year, the United States contributed to around 40 per cent of exports from the region, while for Europe it was 35 per cent.

“Since we've seen the orders at a historic low, a rise is only to be expected. We aren't seeing any huge change in the export pattern at this point. We aren't able to compete with countries like Bangladesh and Vietnam because they are duty free countries,” said Raja M Shanmugam of textile company Warsaw International and former president of TEA. The industry in Tiruppur is expecting the India-UK Free Trade Agreement to happen soon, which may also push the region’s exports by 10 per cent.