FROM THE PRES­I­DENT’S DESK

Apparel - - Advertisement - RAHUL ME­HTA

Dear Friends,

The hottest topic be­ing dis­cussed in the In­dus­try un­doubt­edly is the fall­ing Ru­pee. It is at a his­tor­i­cal low of over R72.00 to a Dol­lar. Is this ben­e­fi­cial to the In­dian Gar­ment In­dus­try?

The an­swer, most def­i­nitely for the In­dus­try’s Ex­porters, is a re­sound­ing yes. It has given a breather to the be­lea­guered seg­ment. To those who had – un­der duress of keep­ing their fac­to­ries go­ing – booked or­ders at low or no mar­gins, it has given some re­lief. To a few oth­ers, a wind­fall profit. Of course, this sit­u­a­tion will not last too long. The Buy­ers, well aware of the chang­ing Ex­change Rates, will surely de­mand re­duc­tions and re­vi­sions of prices. But yet, it will def­i­nitely help in mak­ing our goods more com­pet­i­tive, as long as the Ru­pee de­pre­ci­ates more than the Cur­ren­cies of our com­pet­ing Coun­tries. Added to this is the fact that a weak­en­ing Ru­pee will in­vari­ably in­crease the costs of raw ma­te­ri­als, es­pe­cially those with higher im­port con­tent. My ex­pe­ri­ence has been that over time, the sit­u­a­tion will bal­ance it­self out – though re­main­ing slightly in favour of the Ex­porters. So let us not start par­ty­ing yet. This may prove at best to be a tem­po­rary burst of fresh air. For the Gar­ment Ex­ports to re­ally turn the tide and re­turn to the 12% to 15% growth, fun­da­men­tals will need to change. Un­for­tu­nately, nei­ther the Gov­ern­ment nor the In­dus­try seems to be in­clined.

The Fes­tive sea­son for the Do­mes­tic In­dus­try has started on a weak note, with con­tra­dic­tory re­ports com­ing in from dif­fer­ent chan­nels and for­mats. With Puja, Dusshera, and Di­wali all be­ing 10 days or so later than the last year, straight com­par­isons on a YOY ba­sis is dif­fi­cult, but ini­tial sense tells me my ear­lier op­ti­mism of the mar­ket turn­ing around this Septem­ber-Oc­to­ber was wrong. Per­haps, we will need to wait a lit­tle longer.

In the mean­while, the in­crease in Im­ports com­ing in from Bangladesh is con­tin­u­ing un­abated, and now the Gov­ern­ment is un­der pres­sure from Sri Lanka to open up our Mar­kets and sign an FTA on the lines of Bangladesh. Of course, wiser from the er­rors com­mit­ted in the FTA with Bangladesh, the Gov­ern­ment will en­sure ad­e­quate pro­vi­sions in place to en­sure no del­uge oc­curs. But I see an in­evitable in­crease in Im­ports from Sri Lanka in the com­ing years.

CMAI is fully en­gaged with the Gov­ern­ment in this ex­er­cise, and hope­fully, a win-win re­sult will fol­low.

In keep­ing with the trend in other States, West Ben­gal is keen to set out a New Gar­ment Pol­icy, and I had the good for­tune for a one-on-one Meet­ing with the Dy­namic Fi­nance Min­is­ter of West Ben­gal, Dr. Amit Mi­tra to present the In­dus­try views. Keep our fin­gers crossed.

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