Garment exports warn of job losses unless government acts to counter price rise

Apparel Exports Promotion Council (APEC) of India has urged the government to either ban the exports of cotton from India or allow Indian garment makers to import cotton at zero duty, to offset the increasing prices of raw materials avoid further job losses.

Speaking on the full-year numbers for apparel exports from India, Chairman Dr A Sakthivel pointed out that a recession in Europe, which used to buy nearly half of India’s garment exports, had hit the industry hard.

Textile and garment making is one of the biggest industries in India and gives employment to hundreds of thousands of people in the country. India is one of the world’s biggest garment making centers, largely due to the availability of humongous amounts of cotton cultivated in-country.

However, the European debt crisis is taking a heavy toll on the industry.

“India’s export to EU for the Jan-Feb 2013 amounted to $1.1 billion with a decline of 6.5 per cent compared to same period of previous year,” Sakthivel said. Garments form about 5% of India’s total merchandise exports.

Overall, Europe’s import of apparels was down 3.1 percent during the two months, implying that Indian exports to the region was particularly hard hit. Total imports of apparels by EU during two months was worth $15.6 billion.

“For the period Jan-Feb 2013 apparel suppliers Like Bangladesh and Turkey have registered increase in the apparel export to EU and China and India has registered decline. In the month of February 2013 compared to same month of last year, apparel suppliers Like Bangladesh and Turkey have registered increase in the apparel export to EU and China and India has registered decline. Highest fall in import has been registered by China and India,” Sakthivel added.

To compound the difficulties, many Indian cotton traders are opting to export their cotton to get better prices, instead of giving it to Indian yarn makers. Indian yarn makers too often export to countries like China instead of supplying local textile/fabrics makers. Textiles are the raw material for garment makers.

Sakthivel warned that inaction from the government would result in large scale job losses in India.

“These demands are essential to honor our commitment to the buyers who have given orders before the hike in the cotton yarn. I hope the Government will understand the pressing crisis of this job critical sector and act, he added, Garment exports have been constantly falling since July 2012,” he said.

For the full year 2012-13, apparel exports declined by 6 per cent to $ 12.9 billion (Rs 70312 crore).

EU’s apparel import accounted for $83.6 billion, with a decline of 12.3 per cent over the previous year. India’s export to EU amounted to $5.1 billion with decline of 21 per cent over the previous year.

Apparel imports of the United States witnessed increase of 4.7 per cent in the first two years of 2013 from the previous year and amounted to 13.2 billion dollars.

In the Jan-Feb 2013, US imports of apparel from India declined by 7.2% per cent and reached to USD 571 million against USD 615 million in Jan-Feb. 2013. US imports saw increase from all major suppliers in Jan-Feb. 2013 over the corresponding period of last year except for Mexico and India. In Jan-Feb. year 2013 India was at 6th position. India exported US$ 293 million apparel in Feb. 2013 with decline of 3.2 % over the same month of previous year.

Canada’s apparel import from world was to the tune of US$ 8486.2 million in 2012 which has declined by 1.2% compared to previous year. Import from Indian in 2012 was around US$ 271 million, which is 13% lower than 2011. India is 7th largest apparel exporter to Canada with 3.2% share. China is the largest apparel supplier to Canada followed by Bangladesh, Cambodia, USA, Vietnam and Mexico.