India is losing out in readymade garment exports. With the slowdown in the US — the largest overseas market for India — and rupee appreciation ripping off exporters’ plans, exports of readymade garments have fallen by 13.97 per cent during the April-September period of 2007. Manmade fibre exports were the worst hit with a 26.74 per cent fall. Cotton garment exports, including accessories, that account for a lion’s share of garment exports declined by 17.30 per cent to Rs 12,946.98 crore, according to the Confederation of Indian Apparel Exporters (CIAe). “India’s biggest importer for the readymade garment (RMG) sector is the US and with recession looming large, the repercussions are already being felt in the apparel sector,” it said. There is a 10 per cent drop in exports form April-November 2007 in rupee terms in the US alone as compared to a 18 per cent growth from China. “Garment exports which recorded a decline of about 14 per cent in 2007 due to rupee appreciation are expected to dip further by about 8 per cent in 2008,” it said. CIAe president Amit Goyal said, “This is only the beginning and if the Government does not seriously look into the plight of exporters, this industry could be heading for disaster.”According to Goyal, even exports to EU have taken a beating, where they are down by around 4 per cent as most of the volume business has gone to Bangladesh due to the duty-free concession enjoyed by it, and only the small and quick turnaround business is coming to India. There are also rumours that Bangladesh may be given the LDC (least developed countries) status and under this disguise it can get duty-free access to the US also. “If this happens, it would be the last nail in the coffin for Indian exporters,” Goyal said.JB Jain, a leading exporter, voiced similar concerns and said “Until the government does not increase the drawback rates as demanded by the industry and stabilise the rupee, exports will continue to show a downtrend.” CIAe said threat of US recession and competition from China, Vietnam and Bangladesh is expected to be the dominant concerns in 2008. “The cost of production is believed to be 20 per cent lower in these countries compared to India. In India, costs rise by 5 per cent per annum,” he said.According to Goyal, factories have started shutting down and layoff have become a common practice in the apparel trade which is stuck with unutilised capacities. “Various schemes and packages of the government have failed to infuse any life in this industry,” he said.
