Notes from Experts:

  • Exporters are not able to pass on the increase in yarn prices to buyers, said A Sakthivel, president of Tirupur Exporters Association.
  • Jaipur-based exporters are also feeling the pinch. Our costing has gone up by 25-30% a unit due to fabric prices being hiked by 60-70%, said GP Mittal, president of Garment Export Association of Rajasthan.
  • Garment exports from India to the US, the European Union and Japan are likely to pick up in months ahead on the back of improvement in their retail markets, Confederation of Indian Textile Industries (CITI) General Secretary D K Nair said.

Effect on Garment Exports:

Indian and Bangladeshi garment exporters have started getting better prices now in the US. There are signs of improvement even in the retail market of the EU, all of which indicates that garment exports are slated to improve in the coming months.

The Apparel Export Promotion Council also expects the April export figures to show improvement, even though the industry went through a rough time with outbound shipments dropping 10.16 per cent to $7.92 billion in April-January period of fiscal 2009-10 over the last one.

However, the strength of the Indian currency is a cause of concern for exporters, Nair said.

"The concern now is that of rupee exchange rates. The rupee has strengthened to Rs 44 a dollar from Rs 52 a dollar. This is affecting exporters' earnings," he said.

Also cotton fibre and synthetic raw material is becoming more expensive. Rupee strength, amid this, can be very challenging for us, he added.

Meanwhile, the textiles ministry has set a target of increasing India's share in the global garment export market to seven per cent by 2012.

Across the border in Bangladesh, the situation is much worse, as its garment industry is dependent on imported cotton. Between July 2009 and January 2010, its exports of knitwear declined 13% and woven garments by 16%.