• Apparel Exports registers a decline of 22.76 %
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.