The Hindu Business Line : Garment exports dip 10% in April-May

New Delhi, July 4 Even as the export market for Indian garments is beset by a demand dip — with garment exports down by 10 per cent in dollar terms in April-May 2009, against the corresponding period in 2008 — the Textile Ministry is asking the industry to improve its competitiveness, besides pushing up its sales in the domestic market.

“Export market is no doubt important and the Ministry is taking steps to ensure all possible assistance as stressed by the Union Textile Minister, Mr Dayanidhi Maran. But, there has been slight improvement in the garment sales in the domestic markets too in the first couple of months in the current fiscal,” the Joint Secretary, Ministry of Textiles, Dr J.N. Singh, told Business Line here.

When contacted, the Tirupur Exporters Association (TEA) President, Mr A. Saktivel, said that “moving to the domestic market is an altogether different ball game as the exporters have been working with limited colours, sizes and patterns for overseas markets in contrast to a variety of patterns, sizes and colours the domestic market demands. Only three or four exporters might have moved to domestic segment”. However, he said, after the visit of Mr Maran to Tirupur on June 30, the industry is hopeful that some positive steps to help underpin exporters would be announced in the Budget on Monday.

Meanwhile, the Apparel Export Promotion Council (AEPC) Chairman, Mr Rakesh Vaid, said unless the authorities take measures — matching those put in place by competing countries such as Bangladesh, China, Cambodia, Pakistan and Vietnam — to beat the brunt of recessionary conditions in the form of fiscal fillips, the Indian export garment industry would continue to suffer. He specifically sought “a comprehensive and competitiveness enhancement strategy in the form of stimulus package now when Indian garments are costlier over 20 per cent than our competitors.

Cost concerns

While the higher cost stems from exorbitant credit cost, wages for labour and transaction costs, the unit value realisations have also slipped in recent years, he said adding that the realisation for garments exported to the US fell from $3.6 in 2007 to $3.4 in 2008 and to $3.3 in January-February 2009 a piece.

Provisional figures collated by the AEPC show that garment exports declined by 10.12 per cent in April-May 2009 to $1,572 from $1,749 million in April-May 2008. The Council said that in the $373-billion global clothing industry, India’s share has fallen steadily over the years from 3.3 per cent to 2.8 per cent and to 2.6 per cent in 2008-09. It said that in order to retain the extant share, the country needs to export $18 billion worth of garments annually, which would entail investment of Rs 1,43,000 crore and additional manpower of 2.7 million. In 2008-09, India’s garment exports were 14 per cent short of the $11.62-billion target by fetching $10.13 billion, barely 4 per cent above the previous year’s $9.68 billion.

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