New Delhi, India (BBN) – India’s garment shipments are hardly picking up owing to a strong Indian rupee and depreciation of currencies of its competitors like China, Bangladesh and Vietnam, apparel exporters’ body AEPC said Friday.
In a statement, the Apparel Export Promotion Council (AEPC) called for a carefully considered strategy and a pragmatic approach to arrest the rise of the rupee, reports PTI.
“Despite government’s intentions and support to the industry, exports are hardly picking up. The primary reason is a strong rupee and depreciation of currencies of our competing countries like China, Bangladesh and Vietnam,” AEPC said.
“Chinese Yuan depreciated by 13 per cent, Bangladesh Taka by 6 per cent and Vietnam Dong by 7 per cent whereas India’s rupee hardened by almost 6 per cent over the last 3-5 months”.
Moreover, it said, China got the highest foreign direct investment during this period.
The apparel industry was very hopeful after the special package offered to it in June 2016, where significant financial and investment incentives were offered, besides critical labour flexibilities, with the aim to generate 100.3 lakh additional jobs and USD 30.04 billion additional exports, AEPC said.
“The growing cotton prices and rupee appreciation is not only going to nullify the intended impact of the package, but also weaken India’s position against our competitors, if left unchecked,” cautioned AEPC Chairman Ashok Rajani.
“Also, I request government to fast track the roll out of the special package with full reimbursements of the reimbursement of state levies (ROSL) claims and implementation of the optional PF provision provided in the package,” said Rajani.
Cotton prices have increased by 24.7 per cent on an average, across all categories in the last one year. In fact some categories have seen hike of up to 35 per cent, he added.
India’s readymade garment (RMG) exports were to the tune of USD 1.60 billion in February 2017 with the growth of 5.05 per cent against the corresponding month of February 2016 which was USD 1.52 billion.
In rupee terms, the exports stood at Rs 10,764.56 crore in February as against Rs 10,424.28 crore in the corresponding month of 2016.
The country’s RMG exports during April-February were to the tune of USD 15.544 billion, increasing by 0.57 per cent compared to the same period of previous financial year.
The government has set a target of USD 30 billion for garment exports by March 2019.
India’s apparel industry provides jobs to 10.5 crore persons, directly and indirectly. Each Rs 100 crore of apparel production generates Rs 30 crore of labour income.