The current Rupee depreciation may not be appreciated by Indian economists, but it has definitely proved encouraging for Sri Lankan garment exporters.
Experts are of the opinion, that local garment factories should grab the opportunity and use Indian fabrics to manufacture apparel for export and take maximum benefit from the Indian rupee depreciation.
Speaking at the opening ceremony of AISEX and FASE apparel industry exhibitions recently, Mr Ajith Dias, Chairman, Joint Apparel Association Forum (JAAF) said, “The Indian rupee has depreciated by nearly 20 percent, but the Sri Lankan rupee is still very strong. So this will attract interest from Sri Lankan importers as there is a possibility of using this difference in exchange rates to benefit both.”
Sri Lankan garment industry, each year, imports fabrics worth around US $1 billion, from countries like Hong Kong. However, due to quality differences, local importers avoid Indian cotton. “Sri Lankan garment manufacturers have now moved into the medium to high-end markets. So the fabrics supplied to Sri Lankan apparel exporters need to be of a greater standard than what is generally supplied to Indian apparel exporters. But there is the possibility of companies in Sri Lanka and in India cooperating for mutual benefits,” stressed Mr Dias.
An estimate from JAAF shows that raw materials like fabrics, account for up to 60 percent of manufacturing costs of garments in Sri Lanka. If importers now shift to Indian fabrics, it will help local garment producers remain competitive in the face of increasing input costs and maintain their position in the international market.
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