India’s apparel exports register 19% growth in July

Apparel, Footwear, Fashion

India’s apparel exports register 19% growth in July

Amidst the tight and fast changing economic landscape, garment exporters have registered growth of almost 11% since the last four months. Apparel exports were to the tune of US$ 1279 million in July 2013-14 with an increase of 19% against the corresponding month of the last financial year. In rupee terms, exports have increased by 28% in July 2013-14 over the same month of previous FY. Exports in dollar terms for April-July of the FY 2013-14 have increased 13% over the same period of previous FY and reached US$ 4841 million however, in rupee terms exports increased 18% compared to same period of last FY. In April-July 2013-14 in rupee terms apparel exports were to the tune of Rs 275.38 billion, compared to Rs 233 billion in April-July 2012-13.

In the FY 2012-13, exports in dollar terms witnessed a fall of 6% from the previous FY and totaled US$ 12923 million in April-March 2012-13. Commenting on the US market, AEPC chairman A Sakthivel said, “Apparel imports of the United States witnessed an increase of 3.7% in the Jan-May of 2013 from the previous year and amounted to US$ 30.6 billion. In Jan-May 2013, US imports of apparel from India declined by 1% to reach US$ 1499million against US$ 1500million in Jan-May 2012. US imports saw increase from all major suppliers in Jan-May 2013 over the corresponding period of last year except for Mexico and India. In Jan-May 2013, India was at 6^th position, in the US. India exported US$ 285 million apparel in May 2013 with increase of 3.3% over the same month of previous year.”

On the EU market chairman AEPC informed that, “EU’s apparel import accounted for US$ 32.8 billion for the Jan.-May 2013 with a decline of 6% over the previous year. India’s exports to EU during Jan-May 2013 amounted to US$ 2.5 billion with a decline of 1.1% compared to the same period of the previous year.” Sakthivel further stated that to maintain this rate of growth for the garment sector, RBI must announce separate chapters for exports in the banking sector. “I thank the officials of the commerce and finance ministries for taking up the matter and now the ball is in RBI’s court, I am hopeful they will announce this soon, looking into the fact that most of the exports are SME and this sector is job critical. Therefore, it is requested that RMG export sector, which is the largest employment generator after agriculture, should be considered under priority sector lending.”

It is also requested that a flat rate of 7.5%, as priority sector export credit to RMG export sector may be prescribed as pre-shipment and post-shipment export credit. On depreciating rupee, Sakthivel observed, “A stable currency and exchange rate is always good in the long run. We want buyers to have long term contracts. It is advantageous in the short run; however, it is pushing up the manufacturing cost. Moreover, on account of deprecating rupee, buyers start asking for discounts. Those exporters with high import content of products are facing huge problems as they have to pay more now which is putting a dent on their profits. RMG has around 25-35% import content on average. Moreover, other currencies across the world are also fluctuating. High inflation and input cost further reduces our margins.”