New Delhi (PTI): A sharp decline in demand for Indian garments in the US and European markets has forced the industry to scale down exports target for 2009-10 to $10.5 billion from the last year's target of $11.62 billion.
Apparel Exports Promotion Council (AEPC), the apex body of garment exporters, had set an export target of $11.62 billion for the 2008-09, however, the shipments are likely to be worth $9.85 billion only in the last fiscal.
"The growth in 2008-09 is expected to be flat over the previous year," AEPC Secretary General Vimal Kirti Singh said.
Apparel exports were worth $9.7 billion in 2007-08.
He said in the wake of demand slowdown in the US and EU, which accounts for over 70 per cent of the country's garment exports, AEPC would be exploring the markets of South Africa, Brazil, Japan and Australia besides others.
India's share in Japanese $22.6 billion garment market is less than half a per cent, while in Australia's $3.38 billion market, the share is only 1.22 per cent, AEPC said.
Due to the sharp slump in the demands of Indian garments most of the units are operating below capacity which has led to about one million lay-offs since July 2008, it said.
Alok Industries, a leading integrated textile manufacturer is expecting a robust growth in FY 09 and is confident of maintaining the same.
"We have registered a 35 per cent growth in the first 9- months of FY 09. A similar trend is expected to continue in the next two-years," Alok Industries CFO Sunil Khandelwal said.
The company is engaged in segments like cotton and cotton yarn, apparel fabrics of woven and knits, home textiles, garments and polyester yarn which includes POY and texturised yarn. Alok Industries has a preferred vendor status from leading retailers.
It exports 40 per cent of its turnover to the US market, 15 per cent to European countries, 5 per cent to African countries and the remaining to China, Sri Lanka, Bangladesh and Vietnam.
The company has invested around Rs 5,000-crore in both forward and backward integration plans, Khandelwal said, adding that it has set up 3-lakh spindles capacity in Silvassa, the largest in the country.
It proposes to raise Rs 450-crore through rights issue to finance long-term working capital requirements.
"55 per cent of rights issue is underwritten by banks and institutions, namely SBI, PNB, IDBI and Axis Bank," Khandelwal said.
Source : The Hindu