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Revival in Indian apparel industry being dented by fresh crisis

25 Feb '11
6 min read

The current garment exports from India to Japan are in the order of US$ 125 million, which are almost equally divided between knitted and woven garments. India is amongst the top five suppliers of garments to Japan.

In anticipation of signing of CEPA Agreement, AEPC had organized Apparel Mega Show in International Fashion Fair; Tokyo during the year 2009 and 2010 to project India's clothing potentials.

Added Mr Udani, “AEPC has already made arrangements to showcase Textile and Clothing show by participating in IFF, Tokyo between 20-22 July, 2011. AEPC, in anticipation of the Agreement, had extensive meetings with major buyers like FAST Retailing, who have over 700 stores and the Council is in continuous dialogue with data exchange. In the recently concluded Tex-Trends India – 2011, 98 Japanese buyers visited the show, which itself demonstrates growing capabilities of our country in performing quality garment exports to Japan.”

In spite of the revival, the sector faces new challenges:
Though there is some sign of revival in the sector, the same is being dented by fresh crisis. Around 20.1.2011, prices of cotton yarn have once again started rising abnormally, though it has been largely due to the steep increase in price of cotton. The prices have already increased about Rs. 30 a-kilo and another Rs. 20 per kilo is in the offing. AEPC feels that such steep price increases will once again prove detrimental to the reviving fortunes of the apparel export industry. For AEPC, one of the top challenges of the industry still remains is the raw material security.

To further augment this crisis, the industry recently witnessed a very sensitive issue in Tirupur, the apparel manufacturing hub of India, where the Court ordered the closure of dying units. Said Mr Udani, “The closure of all dying units in Tirupur has been a very big blow to the knitwear industry. We respect the Court's decision, but this has resulted in loss of many jobs. Also, it has led to severe loss of reputation with foreign buyers as all pending contracts are severely delayed. There is a fear that the industry may shift out of Tirupur, if the impasse continues for long.”

The largest employment provider after agriculture and a home for about six million employees, Indian apparel industry has seen worst of its time when it started facing shortage of cotton yarn – the basic raw material for apparel manufacturing. The trend that started almost in the middle of 2009 lasted continuously till November 2010 and crippled the industry. “All these issues are not only distorting the industry's targets, but also harming the industry's socio-economic structure. Because of these varied problems, many of the industry players have been forced to shut down their operations rendering thousands of labour jobless. We had to go long way to restore the normalcy, but we still believe that a lot has to be done to completely stabilize the sector”, addedMr Udani.

Added Mr Udani, “The Council is extremely disappointed that in spite of the Hon'ble Commerce Minister's assurance that special incentive package will be brought out for labour intensive industries like apparel; nothing seems to have been done in the recently announced package. The apparel industry is the largest employer in the country and facing the most severe crisis. We will meet the Honourable Ministry of Commerce to take up the issue further.”

Apparel Export Promotion Council (AEPC)

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