By: Shramana Ganguly Mehta, Ahmedabad


Vietnam Exports to US Up 28%, B'Desh'sFigures Rise 9.01%


The figures are confirming the worst fears of Indianreadymade garment exporters -the global consumer, especially the US consumer who drives growth for the Indian economy, is in no mood to splurge. Unlike inthe past when consumers in the US market, who consume more than 50% of India'stotal apparel export, went on an apparel buying spree prior to Christmas, off-takefrom retail shelves slowed down in the US market, plummeting India's overallreadymade garment (RMG) exports by 9.67% in October 2008 alone.


While India's total apparel exports during April-October 2008 stood at $5,417million, a 0.76% fall compared to $5,458 million exports in the corresponding periodlast fiscal, October 2008 figures alone have a story to tell. The figuresreleased by the Directorate General of Commercial Intelligence and Statistics(DGCI&S), Kolkata, indicate that India exported $658 million worth apparelto the world in October 2008, a dip of 9.67% against $728 million exports inOctober 2007. In September 2008, Indian apparel exporters had added $656million to the country's kitty, again a 5.95% fall compared to September 2007when they managed $697 million exports.


Considering the Apparel Export Promotion Council (AEPC) has already anticipatedthat India might not be able to follow the ambitious growth trajectory of $12billion this fiscal and might stop at just $10 billion, the figures are a clearindication of bad days ahead for exporters.


Exports to the US market for January-October 2008 stood at $2,656.31 million,against $2,758.78 million for the same period last calendar year. The US market has seen apparel exports from India drop by 3.71%, according to the US Department ofCommerce Office of Textile and Apparel. This even as US' total apparel importsfell by 2.78% during the 10 months of this calendar year. In October alone, India's exports to US fell by 4.25%. India exported apparel worth $3,203.65 million inOctober 2007 while it did $3,067.45 million worth business in the segment inOctober 2008.


AEPC director (economic & consultancy) Chandrima Chatterjee points outthere are other problems. "Our competitors like Vietnam and Bangladesh have seen growth in exports even as our numbers dwindle," she says. Vietnam has seen its exports to US grow by 22.51% while Bangladesh grew by 10.15% during January-October2008. When India struggled with exports in October 2008, the two grew by 27.91%and 9.01%, respectively.


Figures shared by AEPC indicate that readymade garment exports to Canadianmarket too fell by 1.35% during January-July 2008. "While RMG imports of Canada during January-July 2008 amounted to $5,860.89 million, a rise of 9.64% compared to the sameperiod in the last calendar year, India's RMG exports to Canada fell. The sub-continent did business worth $211.82 million even as other topsupplier to the country registered double-digit growth," Ms Chatterjeepoints out.


While the European Union market that reported a growth of 14.18% in dollarterms during January-August 2008 vis--vis January-August 2007, India was growing marginally compared to its competitors like China, Bangladesh, Vietnam and Sri Lanka. However, with sales reported to be slowing down in the EU market as falloutof global recession, India could see exports dipping in EU as well. Further, asa psychological reaction, consumption in Middle East and South-east Asianmarkets are also slowing down hitting our exports to those nations, addsClothing Manufacturers Association of India president Rahul Mehta.


 

 

Written by Shramana Ganguly Mehta, Ahmedabad


Originally published in "The Economic Times" dated December 13, 2008: Ahmedabad