India is faring very well - Gokaldas Exports
Since the beginning of this year, Indian textile and garment industry has been facing several problems due to international trade crunch. Statistics show that impact on the exports has been worse. Some experts say that now the situation is getting weaker.
Explaining the situation, Mr Rajendra Hinduja, Managing Director, Gokaldas Exports Ltd, told Fibre2fashion, “As you are aware, for the past few months there has been a recessionary trend and slowdown in the economy of the US. This has been aggravated last week by the shake-up in the financial market, with the bankruptcies of the leading investment bankers.”
He informed, “The figures emerging from the US Department of Commerce suggest that Indian apparel exports dropped by three percent in the past 6 months period of January-June, 2008, but beyond June the decline has accelerated. I think the US imports must have gone down by 5-6 percent in the 3 months which have passed. Retail sales of the US also indicate around 10 percent slowdown.”
However, the MD stressed that the condition of India was better than China, Sri Lanka or other such countries. “Other countries have witnessed a more prominent slowdown in their apparel export figures.”
“Besides the slow consumer offtake, the volatility of the Rupee has also impacted the shipments from India. Apart from the recession, the Rupee being at Rs39 and now being at Rs46 is impacting a lot of companies,” he said.
Mr Hinduja told us in detail, “Most of the companies have made forward contracts at the rates from 40 to 41 and consequently Indian exporters are not able to catch the recent upswing in the Dollar. Around 20 percent rise in cotton prices is also weakening the Indian apparel exports.”
Nevertheless, he said that the domestic market in India is showing bad market sentiments and the low consumer demands. Big retailers like Shoppers Stop, Pantaloon, Aditya Birla and so on have also slowed down their investment plans.
“Much has to be seen with the ensuing festival season which starts with Dassara and Diwali, and hopefully the Indian market would pick up by then,” he said.
Talking about Gokaldas, the Managing Director stated, “The general order position is thin for the Indian market but frankly speaking, we have been among the fortunate few to have our order book full. We have been maintaining our export figures and in fact by the end of FY – 09 we ought to be growing by 10 to 15 percent.”
As for Company's future plans, “We are opening a new factory at Hyderabad next month which will employ about 1500 people. We are also opening a factory in Madanappalli which is a small town in Andhra Pradesh, 3 hours from Bangalore.”
Mr Hinduja concluded on a positive note, “The positive side is that the Rupee has bounced back to 45 - 46 level and with the good cotton crop which is expected, I think India will have an opportunity to snatch a sizable business from our neighbouring countries.”
Fibre2fashion News Desk - India