Indian apparel exports drop 14 pct in 2007; seen 8 pct down in 2008 - trade body

Indian apparel exports declined by 14 pct in 2007 due to rupee appreciation and are expected to drop by about 8 pct in 2008, according to a national trade body.

The Confederation of Indian Apparel Exporters (CIAe) said the export of readymade garments to the US alone declined by 10 pct in rupee terms during April-Nov 2007, and added that exporters have already started to feel the heat from a possible recession in the US coupled with competition from neighbouring countries.

'This is only the beginning, and if the government does not seriously look into the plight of the exporters this industry could be heading for a disaster,' CIAe's president Amit Goyal said.

The threat of a US recession and competition from China, Vietnam and Bangladesh will remain the dominant concerns in 2008, he said.

The cost of production is believed to be 20 pct lower in these countries compared with India's, where costs rise by 5 pct each year.

Even exports to the European Union have declined by around 4 pct as most volume-based business has gone to Bangladesh due to the duty-free concessions enjoyed by it, and only small orders with a quick turnaround are coming to India, he said.

'Unless the government doesn't increase the drawback rates as demanded by the industry and stabilise the rupee exports will continue to show a downtrend,' said JB Jain, a leading garment exporter.