Perfect Sourcing - - Contents -

As the dol­lar in­dex rose to its high­est level, cross­ing Rs 70 mark, ex­porters an­tic­i­pated a pos­i­tive im­pact whereas, the im­porters are wor­ried as the raw ma­te­rial, like fab­rics, ac­ces­sories and ma­chines com­ing from other coun­tries, will now be avail­able at higher prices. Ac­cord­ing to Moti­lal Oswal re­port, ru­pee fell to fresh record low lev­els pri­mar­ily on back of surge in global crude oil prices and on ex­pec­ta­tion that higher crude oil prices will start hurt­ing In­dia’s im­port bill. Ma­jor Asian as well as emerg­ing mar­ket cur­ren­cies re­mains un­der pres­sure and that also is weigh­ing on the ru­pee.

As far as the ap­parel trade is con­cerned it is ob­served to be com­ing back on the growth tra­jec­tory with an es­ti­mated growth of 4-5% in the first half of CY2018 and 2% in CY2017 in US dol­lar terms. The pos­i­tive trend in the global ap­parel mar­ket is be­ing led by the strong re­cov­ery in ap­parel im­ports by the Euro­pean Union (EU), which ac­counts for two-fifth of the global ap­parel trade, it added.

The coun­try’s ap­parel ex­ports are likely to re­main sub­dued in the near term, grow­ing at a mod­est pace of 1-2 per­cent for the rest of FY19, due to fac­tors such as tran­si­tion to the new tax­a­tion regime and liq­uid­ity chal­lenges for the ap­parel in­dus­try, a re­port said. The ex­ports have seen a sharp de-growth of 14% per­cent year-on-year in the first four months of this fi­nan­cial year, rat­ing agency Icra said in its re­port. How­ever, the coun­try’s ap­parel ex­ports saw an un­en­cour­ag­ing trend, with a marginal de-growth of 1 per­cent in FY18 as well as 4 month of FY19, even af­ter ad­just­ing for ap­parel ex­ports to the UAE, which have de­clined in­ex­pli­ca­bly and sharply over the past one year, ac­cord­ing to Icra.

As per the lat­est fig­ures, af­ter a 17% de­cline in the April–june quar­ter, In­dia’s tex­tiles and cloth­ing ex­ports re­vived to wit­ness a jump of 11% in July. Data com­piled by the DGCIS un­der the Union Min­istry of Com­merce showed to­tal tex­tiles and ap­parel ex­ports at Rs 196.36 bil­lion ($ 2.86 bil­lion) for July 2018 com­pared to Rs 176.92 bil­lion ($2.74 bil­lion) for the cor­re­spond­ing month last year. To­tal tex­tiles ex­ports wit­nessed a jump of 15% to Rs 108.79 bil­lion ($1.58 bil­lion) for July 2018 ver­sus Rs 94.29 bil­lion ($ 1.46 bil­lion) in the com­pa­ra­ble month of pre­vi­ous year. Mov­ing in tan­dem, In­dia’s ap­parel ex­ports recorded a jump of 6% to Rs 87.57 bil­lion ($1.27 bil­lion) for July 2018 as against Rs 82.63 bil­lion ($1.28 bil­lion) for the same month last year.

Go­ing for­ward, steps taken by the gov­ern­ment to ad­dress these con­cerns, will re­main cru­cial for ap­parel ex­porters to cap­i­talise on the re­vived global ap­parel trade as well as the con­tin­u­ing loss of mar­ket share by China, which opens up a lu­cra­tive op­por­tu­nity for key play­ers such as In­dia, viet­nam and Bangladesh.

This is­sue of Per­fect Sourc­ing high­lights how the trade war be­tween the US and China will im­pact ap­parel in­dus­try of In­dia and the re­sponse re­ceived in­di­cates that the ten­sion and rift be­tween these two coun­tries over ex­ports will shift busi­ness to In­dia. How­ever, it to­tally de­pends on man­u­fac­tur­ers how they uti­lize the op­por­tu­nity as even a small shift of busi­ness to In­dia will bring lot of rev­enues.

Also, you will see the ar­ti­cle on Gokaldas Ex­ports, a com­pany that has gone through a lot of ups and downs and now with a new Man­ag­ing Di­rec­tor Siva Gan­pathi, who brings im­mense knowl­edge from his past ex­pe­ri­ence in tele­com sec­tor the com­pany is geared for a very pos­i­tive growth in the com­ing times. The com­pany is not only bring­ing up fresh per­spec­tives but is also gear­ing for huge ex­pan­sions.

We hope you will en­joy read­ing the is­sue Will await your feed­back on the same

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