Executives of the big retail houses in India, who specialise in buying, say they are not surprised by the excitement. Retail demand in France-our biggest market-picked up during this quarter as compared to the past few quarters. So, we are already started placing more orders in countries like India, says Mathieu Brousse, country head, Carrefour Global Sourcing Asia. An executive at UK retailer Tesco, who did not want to be named, adds that sourcing from India will go up significantly once other European countries like Spain show signs of bouncing back.

R Balaji, director at the Apparel Export Promotion Council, says that while demand in the West is picking up, the rate of recovery has been surprisingly good. Companies are now averse to hedging through future contracts indicating that they are sure of the rupee remaining weak as compared to the dollar for some time, says Mr. Balaji.

Hedging has been an integral part of the business, wherein the exporters sign a deal to supply their produce to the client at an agreed price for a certain period of time in future, say for the next six months or a year. This provides hedging against a sharply rising rupee and hence, prevents substantial losses. However, earlier this year, the dollar became weaker than expected, and the Indian exporters could do nothing to take advantage of it, bound as they were on the contracts. If risk mitigation leads to losses, it is time to think again, says R Sivaram of Classic Polo.

Britto M Joseph, who heads the JVS Group, and has clients like Wal-Mart and Tesco, says this will last as long as the dollar remains weak against the rupee. But analysts caution this might not last long.

Originally published in "The Economic Times" Bangalore/ Ahmedabad dated December 01, 2009