Garment exports in 2009-10 decline 2.64% .

Indian garment exports declined 2.64 per cent in 2009-10 to $10.64 billion compared with $10.93 billion in 2008-09.

The fall in exports to European markets, a flat growth to the US and price competition from countries like Bangladesh and Vietnam are the key reasons for the dip, said Apparel Export Promotion Council (AEPC) on Friday.

The first two months of the current financial year have also shown a 5.23 per cent decline in rupee terms, as compared with 2009-10.

“The fact is that we are becoming a high cost economy and apparel is very price sensitive. At the retail level in America and Europe, the prices have not risen in the last 5-10 years and we are not able to hold our prices. So the buying is shifting to other cheaper or cost efficient countries like Bangladesh, Vietnam and others,” Chairman of AEPC, Mr Premal Udani, told Business Line.

Bangladesh exports 30 per cent more garments than India does in terms of value, said Mr Udani, which is almost $13 billion.

He added that increase of raw material (cotton and yarn) prices is also “beginning to bite”.

“What shipments we see in May are the goods produced in February and March, when the raw materials had started to climb. We believe in June also we may see a similar picture. Hike in duty of petroleum products has made Indian garments uncompetitive in the world market.”

The AEPC has requested the Government's support in terms of higher duty draw back rates to offset cost disadvantages in India. It is also urging the Government for a faster implementation of the Indo-EU Free Trade Agreement.

Mr Udani said, “This FTA has a potential of increasing India's textiles and clothing exports to the European Union by over $3 billion. It will also create an additional 2.5 million jobs in our economy”.

Source : The Hindu Business Line