India's apparel sector's performance worrying: ICRA

September 07, 2018 - India

India’s apparel exports are likely to stay subdued in the near term, growing at a modest pace of 1-2 per cent for the rest of this fiscal due to factors like transition to the goods and services tax (GST) regime and liquidity challenges, according to a report by rating agency ICRA. This implies a 4 per cent annual decline in apparel exports this fiscal.

The country's apparel sector's performance is worrying as it is contrary to global trends, said ICRA.

Exports have witnessed a sharp de-growth of 14 per cent year on year in the first four months of this fiscal.

This likely will be the fourth consecutive weak year for exports following the 4 per cent de-growth in the last fiscal and modest growth rates of 1 per cent and 3 per cent in fiscals 2015-16 and 2016-17 respectively, a news agency report cited ICRA as saying.

Apparel exports to the United Arab Emirates have declined sharply over the past one year.

A stronger rupee heightened the challenges in the global market by affecting competitiveness of players, according to Jayanta Roy, senior vice president and group head, ICRA.

The global apparel trade is back on the growth trajectory with an estimated growth of 4-5 per cent in the first half of calendar year 2018 and 2 per cent in 2017 in US dollar terms.

The positive trend is due to the strong recovery in apparel imports by the European Union (EU), which accounts for two-fifth of the global apparel trade, ICRA added. (DS)