The Hindu Business Line : Modest spurt in apparel exports in April-May

THE country's apparel export sector, which suffered last year because of the hardening of rupee and adverse market conditions abroad particularly in the main US market, appears to have arrested the decline by posting a modest spurt in volume and a reasonably moderate increase in value during the first two months of the current fiscal.

Available figures of apparel exports during the first two months of the 2004-05 fiscal collated by the Apparel Export Promotion Council (AEPC) reveal that exports of readymade garments to quota restricted countries amounted to 239.8 million pieces valued at $926.5 million, representing a modest increase of 1.40 per cent in terms of volume and a moderate 5.57 per cent in terms of value when compared to the same period of the previous financial year.

Officials in the Textile Ministry are quite optimistic about the garment exports doing well in the remaining months of the current fiscal, particularly as the rupee depreciation against the US dollar is now creeping in with the export prospects brightening when the quota regime for textile and clothing is over by the end of this year. They say that if only the Duty Entitlement Passbook rate is administered in a flexible fashion on fast-moving textile products, exporters would be immensely benefited and the country could easily compass apparel export of $6 billion per annum.

They further said that as of now 55 per cent of the country's garment export goes to quota countries and the balance 45 per cent to non-quota countries about which AEPC does not maintain data.

They are of the view that the country's apparel export is doing well in the non-quota segments too in recent months, as the industry has been meticulously preparing itself to serve these non-quota markets too in the post-quota regime beginning from January 1, 2005.

Exports to the US during April-May 2004-05 have amounted to 93.5 million pieces valued at $417.5 million, signifying a decrease of 1.08 per cent in terms of volume but a marginal increase of 0.05 per cent in terms of value when compared to the corresponding months of last fiscal.

The council attributes the main reason for this unglamorous performance to the drastic fall in exchange rate from US dollar to Indian rupees and the duty-free treatment on import of garments to the US from least developed countries.

It is, however, optimistic that as rupee appreciation against dollar has been stemmed, the Indian exporters price competitiveness vis-à-vis its competitors from neighbouring countries of South East Asia and the sub-continent would slightly improve.

Exports of readymade garments to the European Union during April-May 2004 amounted to 137 million pieces valued at $480.4 million in comparison to the corresponding period of last financial year.

This shows a modest spurt of 3.47 per cent in terms of volume but a massive jump of 12.72 per cent in terms of value.

Exports to Canada during April to May 2004 amounted to 9.3 million pieces valued at $28.6 million, showing a decrease of 19.83 per cent in terms of quantity and 16.13 per cent in terms of value when compared to April 2003-04.

Taking the trend of exports during the first five months of the calendar year 2004, AEPC figures show that exports of readymade garments to restricted countries for the period January-May 2004 have amounted to 640.5 million pieces valued at $2,521.9 million. This represents a marginal increase of 0.47 per cent in terms of volume and 6.37 per cent in terms of value when compared to the same period of 2003.