European financial woes likely to cut apparel exports by 15%

KOLKATA: The Eurozone crisis has hit apparel exports the most. Though the United States is showing a marginal recovery in recent times, orders from Europe have gone down significantly. Orders from Italy and Spain have almost become nil and could reduce India's total apparel exports by 15%.

Indian textile exports hover around $25 billion. Of this, apparel alone contributes $13 billion and the rest $12 billion comprises yarn, fabric and made-ups. Fabric export is expected to be down by 5% in the current fiscal.

"Europe, the largest buyer of Indian apparels, is in doldrums. Italy and Spain are buying much less. US is a bit better than Europe and there has been some recovery in demand. We are expecting a 15% drop in apparel exports," said Premal Udani, chairman of Apparel Export Promotion Council (AEPC).

Orders for men's category of garments, which generally comprise the bulk of orders, have come down significantly. "There are orders for women products, which is however not huge in number," said JB Jain, president of Rupam Exports. Jain, who is the vice president of the Confederation of Indian Apparel Exports, said a number of exporters are now strengthening their presence in the domestic market as demand slows down in the west.

While China has long been a dominant player in the global textiles market, Bangladesh and Vietnam have in recent months been outdoing India in value-added products, although the Indian textile industry is better integrated with backward linkages. A lower labour cost has been their strength. China is facing the risk of currency appreciation and a rising production cost despite manageable domestic inflation rates.

"Bangladesh is a low-cost market and the US and Europe are shifting their orders there. Tirupur, which exports knitwear worth Rs 12,000 crore, is expecting a drop by 15% this year. We are expecting that the market will improve for the fall season," said A Sakthivel, president of Tirupur Exporters Association.

Added DK Nair, secretary general of Confederation of Indian Textile Industry: "The cotton yarn market has not been affected due to the slowdown in the US and the UK as the industry depends on exports to Bangladesh, China, Hong Kong and Korea. Fabric exports, however, have seen a drop of 5%. Apart from the US and Europe, India exports fabric to Latin American, Southeast Asia and south Asian markets."