Apparel exports turn positive in September

Apparel exports have posted positive growth in the month of September. The export market has seen better recovery compared to the domestic market and is expected to close the year with lesser losses.

For the first time in the fiscal, apparel exports saw a positive growth of 10.22 per cent in September to $1,190 million against $1,079 million in September 2019. From a 90 per cent decline in April, exports have been recovering as the industry has been increasingly exporting medical textiles, said Apparel Export Promotion Council chairman A. Sakthivel.

According to him, apart from medical textiles, exporters have also started receiving orders for apparels for the festive season. “We expect exports to further grow in the coming months and make up for a large part of losses suffered in the first half of the year,” he said.

Rating agency Icra projects Indian apparel exporters to report a turnover decline of 20-25 per cent in FY21. However, the domestic market might see a steeper 30-40 per cent decline in revenues by the end of the year.

D o mes t i c - f o c u s s e d branded apparel retail companies had reported a steep fall of 84 per cent in revenues in the June quarter while garmentexporting companies reported a lower contraction of 50 per cent. From a near standstill in April 2020 amid lockdowns, apparel exports recovered in July and August to 78 per cent and 86 per cent of the year-ago levels. However, domestic retail sales are estimated to be at 40-50 per cent of last year’s levels.

The impact on domestic retailers has varied, depending on factors such as strength of online presence, segments being catered to and presence in tier-II and III cities and rural markets, which have performed better than metros and tier-I cities.

“Demand in H2 FY2021 is expected to gather support from extended online festive sales and further relaxations under Unlock 5.0 guidelines, effective from October 15, 2020 onwards. Developments such as a rollback of pay cuts by some corporate entities, government’s festive advance scheme etc are also expected to result in improved cash flows in the hands of consumers, thereby supporting discretionary spending,” said Jayanta Roy, senior VP and group head, Icra Ratings.

As per a survey by the Retailers Association of India, 53 per cent of consumers are looking forward to shop apparels and fashion during the festive season.