Exports on growth mode from next fiscal: CMAI

Apparel exports, which has taken a severe hit due to the rising rupee against the US dollar, is expected to be back on growth mode from the next fiscal.

According to Clothing Manufacturers Association of India (CMAI), exporters have been hit badly as the rupee has appreciated by close to 10% in the last 12 months. "The government has promised to announce measures since it is a labour-intensive industry. The government is likely to offset 5% of the loss through various measures in the next year's budget," Rahul Mehta, president, CMAI, told reporters today.

Exporters can take care of another 5% loss by negotiating prices with the foreign buyers. "Improvement in efficiency will help exporters improve margins. We expect exports to be on growth mode from the next fiscal," he added.

More than 50% of the total apparel produced in the country is exported, and exporters have submitted a memorandum to the union finance minister seeking relief. "One of our main concern is the 12.5% service tax on rentals. Close to 80% of the apparel industry is relying on rented properties for production and distribution. We want this issue to be addressed," said Rajendra J Hinduja, executive director, Gokaldas Exports.

He pointed out that apparel exports is expected to come down to $8.5 billion this fiscal from an all-time high of $9.5 billion last fiscal on account of the rupee appreciation. "It is true that companies are losing profits leading to loss of employment. The scenario will improve if they can sustain for another couple of months," he added.

Hinduja said India still had several advantages such as huge cotton supply, cheap labour and efficient client servicing. "Foreign buyers may be staying away from India for the time being but they cannot ignore Indian apparel producers on a long-term basis. They will agree for price negotiation," he said.