India'S Long Term Garment Industry Is Hard To Benefit From Rupee Depreciation

Since May this year, the depreciation rate of the rupee in India has exceeded 23%. At the end of 8, it hit a new low of 1 to 68.83 rupees. It is still hovering at the level of 1 US dollars to 63.35 rupees at the end of P.

The Crisil Research Research Institute in India recently reported that the rupee will continue downhill, and the 2013~2014 financial year is expected to decline by 5%~8% over the same period.

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< p > when it comes to the impact of the rupee depreciation on the country's "a target=" _blank "href=" http://www.91se91.com/ "clothing" /a "industry, the industry said, on the one hand, as India clothing becomes more competitive in the global market, the export growth trend of the country will be more obvious.

Recently released data show that in July and the first 4 months of this fiscal year, India clothing exports showed a rapid upward trend.

On the other hand, the rupee depreciation has also pushed up the price of imported raw materials and increased the manufacturing cost of enterprises, especially for garments products requiring large quantities of imported fabrics, < a href= "http://www.91se91.com" > Accessories > /a > the average import volume in this field is about 25%~35%, which is particularly serious, and the profit margins of enterprises have been further squeezed.

Dr A Sakthivel, chairman of the India Garment Export Promotion Council (AEPC), said: "only by keeping the exchange rate steady can we help the long-term development of clothing trade."

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In theory, the depreciation of the rupee helped reverse the decline in exports last year, and there are signs that the country's exports are recovering now. P

India's clothing exports in the last fiscal year were around us $12 billion 900 million, down 5.8% from the previous year, largely due to the decline in orders from Europe and the United States.

India's clothing exports increased by 13.1% in the first 4 months of this fiscal year, and total exports amounted to US $4 billion 840 million during the fiscal year.

The growth rate in July was up to 19% in the same month, and exports amounted to US $1 billion 280 million in the month, and the export growth was up to 28% in rupee.

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< p > however, from the performance of < a href= "http://www.91se91.com > > India dress < /a > in its two main export markets, it shows that the rupee depreciation brings no obvious competitive advantage to its export.

In the first 7 months of 2013, US clothing imports increased by 3.6% to US $44 billion 700 million, while imports from India grew by only 3.1%, to US $2 billion.

In the first 5 months of this year, EU clothing imports decreased by 0.6%, to 32 billion 800 million US dollars, while the European Union's imports from India dropped by 1.1%, lower than the average import level.

In addition, India's share of the two largest markets in Europe and the United States is gradually being dominated by major competitors Bangladesh and Vietnam (the United States and Europe account for about 60% of India's total garment exports), and exporters in India are facing a more complicated international environment.

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< p > Crisil Research Research Institute said earlier that India's a target= "_blank" href= "http://www.91se91.com/" > clothing "/a" (RMG) exporters could recover some market share after the collapse of the Plaza in Bangladesh, because foreign buyers began to look for diversified procurement bases, but there is no such sign yet.

In the first 7 months of this year, Bangladesh's exports to the United States increased by 9.2% to $2 billion 997 million.

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< p > "in 2013 ~2014, other countries with competition in the market, such as Bangladesh, Vietnam and China, remained basically stable in exchange rate.

This is particularly important for the long-term development of the garment industry in the country. "

A Sakthivel indicates.

Bangladesh, the second largest trading partner of India, is also closely watching the impact of the vulnerable currencies on India.

At the same time, Bangladesh imports about 1/3 of clothing in India, including cotton, < a href= "http://www.91se91.com" > cotton yarn < /a > and fabrics and cheap clothes.

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Generally speaking, India's export oriented industries, such as the garment industry, will see profits more or less in the short run from the depreciation of the rupees.

But for the overall growth and profitability of the garment industry, increasing market demand and product competitiveness are more important than exchange rate fluctuations.

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