NOIDA: Signs of a global economic slowdown, in a ripple-effect, are being felt in Noida's garment export industry. The city's Apparel Export Promotion Council reports, of its 800 exporters, over 50% do not have any order to ship post March. Those who are shipping now, are only delivering orders received some time ago, in 2016.
"Only about 40% of its usual volume of orders from the USA have reached Noida's garment exporters for shipping for the 'back to school' season of shopping in August, when children rejoin school after a long summer gap," Vice Chairman Apparel Export Promotion Council, India, HKL Maggu told TOI.
Noida, known industrial circles, as 'apparel city', accounts for 15-20% of India's garment exports. Its garment export industry, on an average generates an annual turnover of Rs 10,000 Cr. Noida and Greater Noida together have over 800 garment exporters operating over 4000 units. These units employ over 6 lakh people. Of these, the city's Apparel Export Promotion Council reports, over 60-70% do not have orders from anywhere in the world after March 2017. Major importers of Noida's garments are labels like Zara, Mango, Tescos among several others. The products are largely sent to Brazil, USA, Canada, Europe, England.
"Business is down. It is difficult to cost-effective for importers as our transaction costs have increased and we are not being able to increase the price as the importers in the West can't increase even 1% in purchase amount. Many exporters are only catering to existing orders, as they simply cannot send goods at current price level. Post-Brexit, purchasers in London, England have refused to increase prices, American importers too have become conservative," Lalit Thukral, president, Noida Apparel Export Cluster and Convenor, UP Apparel Export Promotion Council, said.
The garment exporters were already hit by a slowdown since 2016, the demonetization having brought systemic changes in business operations has added to costs. While existing orders have slowed down, the members of the industry worry that with transaction costs hiked post demonetization, the garment export business may lose out to Bangladesh, Vietnam, Cambodia.
However recruitment has started once again post a temporary period retrenchment post demonetization. "Most garment manufacturing units are now 90-100% compliant and fresh recruitments are only being made on the basis of bank accounts, so the process will be clear in times to come," Thukral added.
"Worldwide, importers are taking a wait and watch approach towards India because they are wondering if Indian exporters will be able to deliver at all," Thukral added.
Source: timesofindia.indiatimes.com