Apparel exports likely to miss growth target

AHMEDABAD: After a long bout of currency-related uncertainty and degrowth, Indian apparel exporters are hoping for a good season helped by rising orders from the European Union (EU) for Spring 2009 (mid-November). However, with consumer spending in major markets such as the US deteriorating, Indian apparel exports are likely to miss the current year���s growth forecast of $12 billion, up 20% from last year. The country is expected to export $10 billion of apparels in 2008-09.

���Of the total $9.7 billion ready-made garments (RMG) exports from India in 2007-08, $4.6 billion of RMG were exported to the EU and $3 billion to the US. However, global economic slowdown and decimated consumer spends might mean just 10% growth this year,��� said joint director of the Apparel Export Promotion Council (AEPC) Chandrima Chatterjee.

According to the US Department of Commerce, India���s apparel exports to US slipped to $2203.1 million in January-August 2008 against $2314.2 million in the 2007. However, EU���s share of Indian apparel exports has gone up in the recent past.

���There has been a rise of 15% in January-June 2008 as compared with the previous fiscal. But, there are apprehensions that negative consumer sentiments might hurt our exports to the EU,��� Ms Chatterjee adds. Apparel exporters, who had difficulty bagging orders earlier this year, are betting on orders for Spring 2009, that starts in mid-November. Falling rupee and slowdown in China are giving a ray of hope for exporters for the next quarter.

���Our order positions are at an all-time low and buyers are negotiating for cheaper rates. However, fresh orders for the Spring 2009 are expected to bring joy back to us,��� said Gokaldas Exports executive director Rajendra Hinduja.

His company caters to overseas demand for brands such as Marks & Spencers, Mustang Jeans, Oxbow, Replay, Lebek and Diesel.

Apparel exporter Sudhir Dhingra of Orient Craft believes that the time is right for India to take advantage of the Chinese slowdown. ���China exported apparel worth $156 billion. Even if 10% of it gets diverted to India will bring a huge business to the country. While during the beginning of the fiscal, we had kept our export targets at Rs 750 crore. We anticipated a drop of Rs 150 crore as the currency was appreciating. However, now we are sure we would be able to achieve our targets,��� he said.

However, not everyone is hopeful. President of Tirupur Exporters��� Association A Sakthivel told ET that the cluster comprising 664-odd exporters is yet to see a revival in the wake of rupee depreciation.

���We exported apparel worth Rs 11,000 crore in 2006-07, Rs 10,000 crore in 2007-08 and expected to do Rs 11,000 crore in 2008-09. However, falling consumer spends in the US and Europe may pull down our exports to Rs 9,000 crore,��� he said.

The Indian apparel export industry has faced tough times since August 2008 when exports to both the US and EU plummeted.

���While April 2008 saw 26% growth in Indian apparel exports over April 2007, it was 6.9% in May 2008 as against the same period 2007. However, since August 2008, it plunged to -0.6% as against the same period last year,��� said Ms Chatterjee.