There is no doubt that the world and more specifically the Indian economic and political situation are far from being conducive to growth. The American, the Eurozone recessions adding to the domestic woes make our Indian export of garments very difficult to manage. Foreign buyers are very tough in price negotiations, and even more demanding in terms of high quality and timely deliveries which if not adhered to very strictly (which unfortunately seems to be genetically impossible to stick to by Indian manufacturer/exporters) will give them an even stronger chance to claim further unreasonable discounts for a product which once in their warehouse will cost them almost “peanuts”!!!

Also, the Eurozone crisis bringing along its heavy trimming of social expenditure to all those countries and the difficulties which each brand has to face in borrowing from Banks along with closing of factories resulted in many brands closing down or looking for greener pastures outside Europe. It has also resulted in higher unemployment especially in the Southern European countries where, now, jobs are scarce. However, this brought down people to adjust their salary demands. Now, in Southern Europe more and more employees are ready to work for a much smaller salary to the point where, in the Garment Industry of those countries it becomes profitable to manufacture garments again, hence re-starting, reviving their bankrupt Garment Industry. It means for India or any other low cost manufacturing countries a loss in production/export.

However, the development of the Indian domestic sector is an area where the manufacturers can lean on and even develop their business despite the multidirectional financial turmoil we are all facing. Also, because of the emergence of a stronger, bigger and growing middle class in India, there is a great potential for further development of the Indian domestic retail fashion market.

(Contd.)