AHMEDABAD: Rupee depreciation has bailed out Indian apparel exporters who were unsure of growth following weak consumer sentiment. The final figures are not yet in, but India expects to close the fiscal at $13.5 billion against $11 billion in 2010-11, said chairperson of the Apparel Export Promotion Council A Sakthivel.
The hitherto struggling garment export sector witnessed dampening exports during most part of 2011 due to bad market conditions in European Union and sluggish market in the US. However, exports helped it to sail through. Apparel exports reached $12 billion in February 2012 with a growth rate of 18.9% against the corresponding period last year, Sakthivel said.
More than 80% of India's apparel goes to the consumers in the US and Europe. Anticipating yet another slowdown in the EU and poor demand from those markets, apparel exporters looked at alternative destinations during the period. "Indian exporters entered Latin America, southern and western Africa, Japan, Russia, Israel and Australia during the year.
Also, government's support through Focus Market Scheme and Market Linked Focus Product Schemes and the various FTAs signed have given the apparel exporters market access especially in Japan," Sakthivel said. Newer markets brought in 10% of business for the industry, said Chandrima Chatterjee, director (Economic & Consultancy) and Compliance, AEPC.
Apparel exports contribute 45% to India's total textile and clothing exports. India's exports in 2011-12 stand at $30 billion against $27 billion in 2010-11, said DK Nair of Confederation of Indian Textile Industry.
The industry says the rise is owing to depreciation of the Indian currency during the period. Indian currency depreciated from around Rs 45 in April 2011 aganist the dollar to more than Rs 50 in March 2012.
"No new capacities were added in 2011-12 and order books remained stagnant. The demand from Europe was not exciting either. It was only because of our currency that we could clock these numbers," said Amit Gugnani, Technopak's VP, fashion (textile & apparel).
Caught on the wrong foot for employing child labour and forced labour, the industry has a bigger task in hand in 2012-13. Apart from trying to compete with other cheap manufacturing destinations in South East Asia, the industry would need to be tough on compliance. AEPC is trying hard to push Driving Industry Towards Sustainable Human Capital Advancement (DISHA) programme among the 8,000-odd community. The largely unorganised and fragmented sector has been criticised by the US for engaging child labour and bonded labour and would have to come clean to lure buyers.
Source : economictimes.indiatimes.com