• Ap­parel Ex­ports reg­is­ters a de­cline of 22.76 %

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Is there a Light at the End of Tun­nel?

• Man­u­fac­tur­ing of Ap­parel has shown a de­cline of (-18.6% )in March, 2018 and (-11%) for the pe­riod April-march, 2017-18 • Ap­parel Ex­ports De­clin­ing since last 11 months

• Will these Tur­bu­lent Times End Soon?

A mar­ket anal­y­sis by Team Per­fect Sourc­ing

In­dia’s ap­parel ex­ports have shown a big de­cline of 22.76 % for the month of April

2018 as against the cor­re­spond­ing month of April 2017, as per the lat­est trade data. In April 2018 the In­dian RMG ex­ports were to the tune of USD 1.34 bil­lion (ap­prox.) as against the cor­re­spond­ing month of April 2017, when the ex­ports was USD 1.74 bil­lion (ap­prox.). In ru­pee terms ex­port for the Month of April 2018 was Rs. 8859.67 Cr as against Rs. 11272.24 Cr. in

April 2017, show­ing a de­cline of 21.40%.

In­dia’s ap­parel pro­duc­tion has also shown a de­cline of 18.6% in the month of March, 2018 and a de­cline of 11% for the pe­riod April-march, 201718 as per the lat­est IIP fig­ures. This is the 11th straight monthly de­cline in ap­parel pro­duc­tion.

De­spite ru­pee de­pre­ci­at­ing against the green­back by al­most 6% in re­cent months to trade around Rs 68 per US dol­lar, In­dia’s ap­parel ex­ports have not ben­e­fited from the trend, re­sult­ing in a 22.76% fall. Last year (2017-18) the in­dus­try wit­nessed a strong growth but now the ex­ports are in a neg­a­tive ter­ri­tory since Oc­to­ber due to a de­clin­ing trend in the global ap­parel in­dus­try. The high base ef­fect has been due to the re­lease of ROSL amount dur­ing April

2017 but the con­tin­ued back­log in GST and ROSL is af­fect­ing the sen­ti­ments of ex­port in­dus­try.

While con­sump­tion in the in­ter­na­tional mar­ket is grow­ing at around 1 to 2% com­pe­ti­tion is in­creas­ing too, as the busi­ness sees new en­trants like Myan­mar and Ethiopia. Com­peti­tors’ cur­ren­cies are also de­pre­ci­at­ing, but they don’t have prob­lems that

In­dian ex­porters do.

“We would like the gov­ern­ment to ad­dress the

De­spite ru­pee de­pre­ci­at­ing against the green­back by al­most 6% in re­cent months to trade around Rs 68 per US dol­lar, In­dia’s ap­parel ex­ports have not ben­e­fited from the trend, re­sult­ing in a 22.76% fall

is­sue at the ear­li­est, so as to re­verse the trend of stag­nat­ing ex­ports,” said HKL Magu, chair­man of AEPC.

Apart from the de­lay in re­fund of levies and re­duc­tion in draw­back avail­abil­ity of man­power is also a big con­cern in all the ex­ist­ing tex­tile cen­ters and pro­duc­tiv­ity is low. Be­cause of GST the cost of raw ma­te­rial, job­work, labour wages all are wit­ness­ing in­creased cost. All these put to­gether makes In­dian ex­ports at least 10-12% costlier than com­pet­ing coun­tries. High cost is hurt­ing both the topline and the bot­tomline.

Led by AEPC, the ap­parel ex­porters have urged the Cen­tre to look at schemes to boost ex­ports, be­sides look­ing at labour laws, as their pro­tec­tion is di­rectly linked with pro­duc­tiv­ity, in which In­dia is far be­hind peers like Viet­nam and Bangladesh. The price dif­fer­ence be­tween In­dian and Bangladeshi prod­ucts is around 20%. Viet­nam has a cost ad­van­tage of around 10% while also hav­ing in­creased its pro­duc­tion as more Chi­nese and Tai­wanese play­ers have set up their fac­to­ries in the coun­try.

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