Apparel exports recorded a decline of about 14 per cent in 2007 due to rupee appreciation and is expected to dip further by about 8 per cent in 2008.
India's biggest importer for the RMG sector is USA and with Recession looming large the repercussions are already being felt in the Apparel sector.
There is a 10% drop in exports form April – November 2007 in Rupee terms in USA alone as compared to a 18% growth from China.
Threat of American recession and competition from China, Vietnam and Bangladesh are expected to be the dominant concerns in 2008.
The cost of production is believed to be 20 per cent lower in these countries compared to India. In India, costs rise by 5 per cent per annum.
While India immediate threat has always been form its neighbors like Nepal, Bangladesh and Srilanka exports form these countries have been growing infact even countries like Indonesia and Vietnam which never posed a threat to India have now starting outperforming expectations.
According to Mr.Amit Goyal, President Confederation of Indian Apparel Exporters ( CIAe) this is only the beginning and if the Government does not seriously look into the plight of the exporters this Industry could be heading for Disaster'
According to Mr.Goyal even exports to EU have taken a beating where it is down by aprx 4% as most of the Volume business has gone to Bangladesh due to the Duty Free concession enjoyed by it and only the smalland quick turn around business is coming to India.