India'S Clothing Exports Are On The Verge Of China'S Beachhead Crisis.

India garment exporters warned that the increasing cost and the weak India currency made India's textile industry on the brink of crisis and hand over business to neighboring Bangladesh and Mainland China.

ApparelExportPromotionCouncil (AEPC), India's clothing Export Promotion Council, has attacked India's official plan to substantially increase oil tariffs and excise taxes. At the same time, India cotton spinning mill has continuously increased the price of cotton yarn in the past 4 months.

AEPC thinks that the average 40% cotton yarn price increase, the India rupee's appreciation against the US dollar / euro, and the sharp rise in the minimum wage of Delhi workers are damaging India's textile industry.

AEPC chairman PremalUdani revealed that there was no connection with the increase in the cost of cotton yarn input, but the spinning mill had increased its yarn price from an abnormal increase. In addition, the increase in tariffs and excise taxes on imported oil products in the plan will severely damage the textile and garment industry in India, and the shortage of energy will further increase production costs.

In the past 3 months, India exporters have been negatively affected by the steady decline in the India rupee's appreciation of about 4% and 10% respectively against the US dollar and the euro. AEPC pointed out that small and medium-sized textile export enterprises, which earn only a small profit from 7%-8%, have suffered a great impact.

Udani chairman added that many exporters are unable to confirm new orders and production expectations are also falling sharply, because Western retailers have just got rid of the worst economic downturn in decades and are not in the mood to offer better quotations.

It is reported that the Delhi government has raised its minimum wage from February 1st (2010), with an amplitude ranging from 33% to 49%. Chairman Udani said that the textile and garment industry in India has not yet completely divorced from the economic recession. The unprecedented wage adjustment of Delhi's government will jeopardize the sustainable operation of enterprises. Once the competitiveness of India's textile and garment industry is lost, the great opportunities will be transferred to countries like China and Bangladesh, and it will not be easy to recover the lost territory.

AEPC pointed out that India's clothing exports amounted to US $7 billion 900 million in the fiscal year April 1, 2009 to January 31, 2010, down 10.2% from the US $8 billion 800 million in the previous fiscal year.