FROM THE EDI­TOR-IN-CHIEF’s DESK…

Apparel Online - - News -

The last five years have been volatile for the in­dus­try. In the wake of global un­cer­tain­ties, prices have dwin­dled and vol­umes shrunk…but still we are managing to cul­ture some re­sis­tance, go­ing down­hill. A close look at the ex­port data for our main mar­kets, the US and the EU over the pe­riod 2012 to 2016 (both in­clu­sive) clearly shows that af­ter a ma­jor slow­down in 2012 over 2011 in the US and EU, ex­ports to both mar­kets reg­is­tered de­cent growth in value and vol­ume in 2013 and 2014.

Whereas the year 2015 was good for ex­porters work­ing in the US with a pro­por­tion­ately higher in­crease in value to vol­umes, as both reg­is­tered pos­i­tive growth. For the EU, val­ues reg­is­tered note­wor­thy in­crease, though there was de­val­u­a­tion of the ru­pee against the Euro, dur­ing that pe­riod, putting the vol­umes un­der pres­sure.

Last year, both mar­kets were slow through­out the year. While val­ues dipped in the US, re­flect­ing lower prices of­fered on al­most the same order sizes, the vol­umes also de­creased marginally in the EU against a de­cent in­crease in value (5.84%).

Busi­ness in the first six months of this year (Jan­uary-June) have been chal­leng­ing with both mar­kets see­ing neg­a­tive trends in value and vol­umes. Even the UVRs for both des­ti­na­tions have de­creased in the six-month pe­riod from last year.

It’s good to read the Govern­ment figures of 26% growth in ex­ports for September. But I am very much scep­ti­cal on the con­tri­bu­tion of the ap­parel sec­tor in this growth.

No doubt the prices are get­ting sharper, and what is more wor­ry­ing is that core prod­ucts like skirts, blouses and un­der­gar­ments for which In­dia is fa­mous are reg­is­ter­ing neg­a­tive growth from In­dia in both mar­kets. On the other side, men’s shirts to the US and sweaters and nightwear to the EU have con­tin­ued to reg­is­ter growth de­spite the over­all slow­down.

The US has seen many store clo­sures this year and the EU is strug­gling with a weak econ­omy, be­sides many in­ter­nal is­sues, from refugee ac­cep­tance to Brexit. The buy­ing sen­ti­ments in gen­eral are low and re­tail ex­perts are cau­tious in their pre­dic­tions for the hol­i­day sea­son.

Global con­di­tions are im­pact­ing busi­ness across all man­u­fac­tur­ing des­ti­na­tions, with Bangladesh reg­is­ter­ing its low­est growth in more than 15 years dur­ing the last fi­nan­cial year, clos­ing in June 2017, and China reg­is­ter­ing only 3.4% growth in 2016 in gar­ment ex­ports to the world, much lower than ex­pec­ta­tion.

For In­dian ex­porters, it has been a dou­ble whammy…while they face the same chal­lenges to be com­pet­i­tive, as other des­ti­na­tions on a global ba­sis, many in­ter­nal is­sues are fur­ther pulling them down.

The in­ter­est­ing part is that our com­peti­tors feel that the Govern­ment is do­ing a lot for the in­dus­try, cit­ing the spe­cial package given by the Tex­tile Min­istry, the var­i­ous skill de­vel­op­ment pro­grammes and the in­cen­tives be­ing given by the State Govern­ments…but on ground level, the ac­tual sce­nario is dif­fer­ent.

These moves are not trans­lat­ing into im­prov­ing busi­ness sen­ti­ments… the main hur­dle is ru­pee volatil­ity and pro­tec­tions be­ing given to cer­tain coun­tries at the in­ter­na­tional level. The steps now be­ing taken by the Govern­ment in all re­al­ity are to ward off dif­fi­cul­ties which are in some mea­sure their own cre­ation, in the first place.

The in­dus­try now needs to push the Govern­ment to sup­port in­fra­struc­ture and other fa­cil­i­ties that will en­able bet­ter ef­fi­cien­cies and not draw­backs and in­cen­tives!

I have said this many times and I want to re­it­er­ate it again… It is time for the in­dus­try to start work­ing to­wards im­prov­ing ef­fi­cien­cies and pro­duc­tiv­ity, if they want to stay com­pet­i­tive.

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