Apparel exporters reel under severe order crunch, CIAe

11 Oct '07

4 min read

Indian government under its 11th Five Year Plan has chalked out ambitious plans of exporting 6 billion apparel pieces at US $ 34.02 billion (Rs. 1, 53,100 crore) by 2011-2012.

This target is a pipe-dream considering the fact that exporters are reeling under severe order crunch and will be unable to even reach last years' export level, according to Mr. Amit Goyal, President, Confederation of Indian Apparel Exporters (CIAe).

During the tenth Plan period, exports of readymade garments had increased at the annualized rate of growth of 13.72 percent. The major increase was witnessed in 2005-06 when it increased by 28 percent.

However, the appreciation of the rupee has hit the exporters below the belt. And there is no respite coming from the government.

The situation is alarming as export orders have nose-dived by 10-15% and for the first time in the apparel export history, India will end 2007-2008 fiscal in negative, stressed Mr. Goyal.

The export orders are on decline as India is unable to offer competing prices. The orders are going to countries like China, Bangladesh, Sri Lanka.

Even a country like Indonesia, which was not a big time exporter is on the global scene because its industry is able to compete on price front, CIAe President informed.

Considering the present scenario, apparel industry which was termed as a 'sunrise industry' will fade into oblivion in near future.

The government keeps on harping about the fact that garment is the mainstay of Indian textile exports. However, no support is coming forth from the government to sustain exports leave apart increasing exports.

The situation is such that many of the units have downed their shutters and others would be forced to cease their operations if the government does not lend its support to overcome the problems of rupee appreciation.

It is high-time that government works out some package for exporters who have been hit by the rupee, which has appreciated by over 11% since January this year, touching a nine-and-half years' high mark of 39.57 to a dollar, Mr. Goyal pointed out.

The mass closure on account of decline in exports, CIAe President said, will hit the work-force very badly and thousand and lakhs will be become jobless.

Presently, apparel exporters employ 2.5 million people and the government envisages that another 2.5 million work-force would be required to achieve the target of US $ 34 billion by 2011-12.

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