'Depreciating rupee always helpful'- Mr Hinduja, Gokaldas Exports
Mr Rajendra Hinduja
Exporters from the textile and garment sector are wringing their hands in glee at the prospects of bagging even more business in the coming months due to the depreciation of the Indian rupee against the US dollar and at the same time appreciation of the Chinese Yuan.
This new development in recent days has taken the confidence of the exporters from the sector to new levels which have been witnessing depressing days, ever since the tsunami like economic meltdown unfolded and pushed the global trade towards a slowdown with no definite dates of end in sight.
The Central Bank would also be in favour of the rupee depreciating even further at the cost of imports becoming costlier and in the process also raising the import bill, since it is expected to help the economy of the country, brought about by a possible surge in exports, due to the increased competitiveness of its products.
Fibre2fashion spoke to Mr Rajendra Hinduja, Managing Director of the Bangalore based Gokaldas Exports Ltd, India's biggest export manufacturer to learn about the competitive advantage the Indian textile and garment exporter has vis-à-vis his Chinese competitor, owing to the depreciation of the rupee and appreciation of the Yuan.
We first asked Mr Hinduja to explain as to how does the depreciating rupee help the clothing exporter when currencies of competitor countries appreciate, to which he explained, “The depreciating Rupee is always helpful to any exporter, not only clothing exporters”.
He added by saying, “Since it will realize more rupees when compared to earlier rates and hence the depreciated rupee is definitely helping us to compete with other countries. Presently, the currencies of other Asian countries also are depreciating, except for China, whose currency has apparently has not depreciated or appreciated considerably”.
We next asked him to divulge his strategies to achieve his company's targets this year, to which he said, “This year is a difficult year, especially when the retailers in both the main markets, the U.S. and Europe, are reporting smaller sales and indications are that retail sales are down by 25 percent”.
He continued, “Add to this, the competing countries like Vietnam and Bangladesh are very active and are snatching our business and the only strategy available to clothing exporters is to increase productivity and this is no easy task. With the present culture of the labour and the present labour laws, it is a difficult task to improve productivity”
Optimistically he added, “However, we are trying to explore new markets and hopefully we will try to get some new business from them”.
To a question as to how he foresees the future of the industry, Mr Hinduja commented, “The future of the industry depends upon both the U.S. and European markets and hopefully, the recessionary trends would take a turn in about six months from now after which, we will see a good portion of business coming to India”.
Continuing, he said, “China is also facing several internal problems and we (Indian exporters) could be snatching some business out of China's portion. The visibility is quite poor in terms of new business (orders) but indications are that the market will take a turn shortly and no sooner this happens, we will be in the fray to get more business.
Fibre2fashion News Desk - India