Garment Exporters In India May Lose Their Low Cost Competitiveness
India's clothing exporters showed little signs of recovery this autumn and winter as international buyers gradually moved to low-cost neighbouring countries. Clothing exports in India dropped sharply, even though exporters cut the price of 11-12%.
Major global buyers, such as WAL-MART, JC Penney, Li&Fung, Gap and Target, have introduced plans to cut 12%-15% from India this year, while increasing procurement from neighboring countries, said Rahul Mehta, President of India Garment Manufacturers Association. Vietnam and Bangladesh have reduced import taxes, reduced production costs and encouraged local producers to provide more competitive prices, an industry official said.
Industrial analysts say clothing exports from India will be lower than Bangladesh, Vietnam, Indonesia and Kampuchea. It is expected that in the current fiscal year, clothing exports in India are expected to reach US $9 billion, down 10% from last year. Bangladesh is expected to export $12 billion in clothing.
With the economic recession in western countries, global buyers cut back on procurement. Premal Udani, general manager of Kaytee, said that if winter and autumn orders were not able to meet expectations, industry might face another challenge.
At present, orders in India are lower than 20-25% in the same period last year, because exporters are in low spirits because of the gloomy prospect of the textile industry. The two relief policies provided by the government and the 2% credit interest rates before and after exports extend to September 2009, but this seems to have limited industrial remission.
Exporters say they want to get rid of the extra fringe tax and get a higher tariff rebate policy. However, a policy of remission should be held before parliamentary elections, a government official said.
Editor: vivi
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