Being hit badly by recession in western economies like the US and Europe, which form the primary markets for Indian garment exporters, the industry may close the financial year 2009-10 at around $ 10 billion, similar to last year. While the latter part of financial year 2009-10 may have seen an improvement in western economies, garment exporters in India believe the impact of recession was bad enough to maintain a status quo in growth of garment exports.
"The first two quarters of financial year 2009-10 were really bad for garment exports. It was only from the third quarter that things began to improve. The good part is that instead of a major decline in growth, the industry might close this year at last year's level or a little less than that," said DK Nair, secretary general, Confederation of Indian Textile Industry (CITI). According to Nair, garment exports from India may be barely touch $ 10 billion in FY 2009-10 as against $ 10.9 billion of last year.
The industry, which comprises around 8,000-10,000 garment exporters, supplies garment mostly to the US and Europe. However, in order to improve the numbers, garment exporters are looking at newer markets like Australia and Latin America.
"Although the US and Europe markets are showing the signs of revival, the first half of the year was in doldrums. Upto November, garment exports were 7-8 per cent less than last year. It is the current season's orders that seem reasonably good. Hopefully, at the end of this year, we may close just about what we did last year. Since our main markets are badly hit, every exporter is now creating alternatives for himself, like newer export markets or domestic retailers," said Rahul Mehta, president of Clothing Manufacturers' Association of India (CMAI).
The fresh markets for garment exports from India include Australia, Latin America, Middle East and Japan, among others. However, SN Rangaiah, general manager (finance) at Gokaldas Exports Ltd. said the order books from these new markets is still relatively less.
"These markets are not voluminous in nature. Nevertheless, order books have been steadily growing since last two quarters. Some of the garment exporters are also looking at domestic market. But our past experience has been that money circulation is an issue in Indian retail scenario," said Rangaiah.
One of the largest exporters of garments in the country, Gokaldas Exports, which has a capacity of 300 million garments per month, has been witnessing an order book of Rs 250-300 crore per quarter.
Source : Business Standard