Faridabad export houses exploring new markets to reduce their dependence on Europe and USA.

FARIDABAD: Faridabad garment export houses, and export promoters, have started looking out for customers in new geographic regions like Israel, Russia and South Africa. They are trying to reduce their dependence on the western markets like Europe and the US, which in the last five years, have been badly hit by the economic dip.

Industry experts quoted the data provided by a report by the Apparel Export Promotion Council ( AEPC). The report states that India's garment exports declined by 10.5 percent year-on-year to $1.1 billion in June this year due to weak demand in the US and European markets. They said that this report is also relevant to the present condition of Faridabad export business.

According to Vijay Jindal, MD of two Faridabad-based export houses, Shivalik Prints and SPL Industries; "Faridabad export houses contribute up to 15 percent in the overall Indian market. And since the US and Europe are together account for about 65 percent of India's total garment exports. This has also affected the garment export business by 10 percent-15 percent."

He further added, "As the demand is slowing down in the US and European markets, buyers are placing few orders to us and are not keeping inventories."

According to Gurbir Madan, MD, Madan Trading, a local export house that exports about 1,00,000 units per month, "We have our permanent clients in European countries like France, Norway, Denmark, UK and Spain. Earlier, we were exporting up to 40 percent to them. But due to hitches in the markets it has reduced to 15-20 percent."

The slowdown in the past four years has been causing a major decline to the key Indian garment export hubs like in Tirupur (Tamil Nadu), Chennai, Mumbai, Gujrat and Bangalore.

However, it has not even spared country's growing export clusters in the NCR - one that is in Faridabad, has also absorbed the worst of the recession. Industry experts said that the export houses located in Tirupur, Bangalore, Chennai and Mumbai are doing 70 percent of export business from India. And remaining 30 percent comes from NCR.

EXPLORING NEW MARKETS

Players informed that in order to reduce dependence on the western markets, they have diversified into new markets like Israel, Russia and South Africa.

"Yes, seeing the sluggish demands in all major global markets, we have reached out to our new clients in the countries like Israel and South Africa," said Madan Kukreja, director, Super Fashion, a garment export house in Faridabad.

According to Gurbir Madan, " Since last year, we have started trading with countries like South Korea and Israel. At present, we export near about 20 percent of our production to them."

Although the industry people further informed that their export ventures in these new countries are not meeting expectations. "These new customers are not paying us well. The prices are so competitive that there is little or no room for profits," Madan added.


Source : economictimes.indiatimes.com