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Knitwear exports from Tiruppur are expected to witness a 4 per cent decline in dollar terms for FY23. . However, in rupee terms exports may see a marginal increase in FY23. This comes a year after recording its highest-ever annual exports.
Industry representatives and analysts are cautiously optimistic about the FY24 growth outlook as they expect gradual improvements in orders from Q1 of FY24.
For April 2022-February 2023 period, knitwear exports from Tiruppur stood at about $3.95 billion, while all India knitwear exports were at $7.2 billion (it was $8.17 billion in FY22).
“For FY23, the total knitwear exports from Tiruppur are estimated at $4.31 billion, a decrease of 4.22 per cent over $4.5 billion recorded in FY22. However, in rupee terms, there will be a marginal increase of 3.12 per cent to ₹34,570 crore from ₹33,525 crore in FY22, mainly due to currency depreciation,” according to Tiruppur Exporters Association.
After strong growth in Q1 of this fiscal, knitwear exports started to decline due to a drop in orders from key markets such as Europe and the U.S. as an impact of the Russia-Ukraine war. Though exports recovered a bit in the last few months, but still lower than in previous years.
Improvement in orders
Knitwear exporters say that buyer queries have improved, and it looks like order placements for the upcoming season should improve.
“The order flow is gradually increasing and spinning mills have started running at full capacity in all seven days that reflect the increase in demand from the garment sector,” K M Subramanian, President, Tiruppur Exporters’ Association (TEA) told businessline.
Calibrated buying
Exporters are witnessing some pockets of recovery in major markets. Brands and retailers, who exhausted their inventories, started their calibrated buying in the knitwear segment.
“All major international brands during their recent conference calls guided for low single-digit growth for the calendar year 2023 and this is creating some confidence about the possibility of basic volumes without major contraction,” says Prabhu Damodharan, Convenor, Indian Texpreneurs Federation.
Varun Vaid, Business Director, Wazir Advisors, a management consulting firm with a special focus on textile and apparel sectors, says that the revival is linked largely to the reduction of inflation in global markets which in turn is a macro factor linked to Russia Ukraine war and stabilization of global supply chains.
“If we look at just next season, the situation looks better but for sustained growth, the macro issues need to sort out,” he adds.
Overall, exporters are expecting a gradual and month-on-month improvement and capacity utilisation from April and the industry is expected to reach good stability during Q2 of FY 24.
Meanwhile, TEA and exporters continue to press for support from the government to tide over the short-term crisis caused by the poor order flow in recent months. They have urged the government to increase interest subvention provided under Interest Equalization Scheme from 3 per cent to 5 per cent across the board.
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