India’s readymade garment exports have surged by 14 percent in dollar terms to $6 billion in April-August 2013.
With the rupee weakening against the dollar sharply, Indian readymade garments are more competitive than ever in recent years.
And what has helped the Indian garment makers is the trouble that Bangladesh has been facing over Western concerns for labour safety and working conditions in the country’s RMG sector.
Many Western brands are turning to India because sourcing from Bangladesh has posed ethical questions and schedules that may be affected by unrest in the RMG sector over wages.
With Indian readymade garments cheaper by anything between 15 to 20 percent due to rupee’s depreciation against the dollar, it works well for importers across the world.
“The (retail) chain stores in the European Union are also under pressure not to buy from countries where the compliance record is poor,” senior industry officials told the ‘Times of India’.
With the order book starting to improve since the beginning of 2013, exporters had predicted that shipments would increase by 10 percent for 2013-14.
“The vibrancy is coming back. The rupee depreciation is helping us to get more orders. So, we expect 18 percent growth in the current [financial] year,” A Sakthivel, president of Tirupur Exporters’ Association ( TEA) told the ‘Times of India’.
“Disney and Gap (leading retailers) have already given directions not to buy from Bangladesh,” Sakthivel said. “That helps us.”
“The response has been good both in traditional and non-traditional markets,” he said.
Tirupur in South India is one of the top RMG industry zone in the country.
After stagnating for three years, garment exports from Tirupur have started to grow at a fast clip. Garment exports, which have been Rs 12,500-13,000 crore a year for the last three years, are expected to grow by a robust 18 percent in the current financial year.
Raja M Shanmugham, MD of Tirupur-based export house Warsaw International told the ‘Times of India’: “Buyers are giving preference to India while placing new orders.
“The American market has revived for us,” said Premal Udani, MD of garment export house Kaytee Corporation.
Bangladesh has been the second largest exporter of readymade garments after China.
That is the mainstay of its export earnings and the country’s economy, remittances from expatriates being the other pillar of Bangladesh’s booming economy.
But unless Bangladesh gets it act right in the ready-made garments industries, like improving safety and working conditions and wages, it could be in for some tough competition from big neighbour India.
Source: UNBConnect
