2017 , the industry was looking forward to a fresh start in 2018 and at the beginning of the year , most of the companies that Apparel Online interacted with were hopeful that the business would improve this year and even the policy issues which had created such havoc to the business , mostly in terms of liquidity would be resolved . Six months of this year have passed and many conflicting views are coming in …, while some believe that nothing positive has happened so far and the situation is similar to what it was last year . There are others who see the situation as an opportunity and are excited with prospects that are developing !

PRICE PRESSURES CONTINUE … WEAKENING RUPEE A SAVIOUR

Analysing business trends from a data perspective and an industry perspective many times do not match , yet there are hints of directions that cannot be ignored . And when analysing the data for the first few months of this year that are available for our key markets of the US and EU , it is obvious that prices are under pressure . In the EU , UVR for Indian products was down from Euro 20.75 to Euro 20.10 from a year earlier ; however in the US , the UVR during the first 4 months rose marginally from USD 3.47 to USD 3.54 . This increase in UVR is being attributed by many to the weakening of the rupee against the dollar . “ The only silver lining I see today for Indian exporters is weakening of rupee but how much

“ Our industry has a huge opportunity to grow in these tough times , especially since China is slowly exiting the apparel space .”

– Deepak Seth , Group Chairman , Pearl Global

“ Out of approximately Rs . 4,000 crore of GST refund that belonged to apparel exporters , Rs . 2,000 crore has been released so far .”

– HKL Magu , Chairman , AEPC

will compensate the disadvantage that industry is facing because of many other factors is yet to be seen ,” says Vijay Agarwal , Chairman , Creative Group .

The Indian rupee has depreciated from about 63.50 per dollar in January to 68.35 per dollar on May 23rd , and has further fallen to 67.80 per dollar on June 22nd . Rising crude is putting further pressure on the already stressed rupee by widening fiscal deficit , and hence there is good possibility that Indian rupee may touch 70 per dollar in near future . “ Despite rupee depreciating against the greenback by almost 7.5 per cent in recent months to trade around Rs . 68 per US dollar , India ’ s apparel and textile exports have not been benefited from the trend ,” opines Jaspal Dehal , CEO , Majestic Global , a buying house in Noida that deals in home textiles , apparels and accessories , representing customers from Australia , Germany , Switzerland and USA .

Although depreciation of Indian rupee could spell trouble for companies that have a higher amount of dollardenominated debt , it will prove to be a boon for export-focused companies . Jaspal adds that the general perception is that depreciation of rupee will lead to exponential gain for exports , but the reality is that gains are limited , as banks force exporters to hedge against risks of currency volatility , so , exporters fix their margins . Also , foreign customers tend to bargain on weak rupee , which eventually minimises gains . “ The only positive I see , is if the rupee remains

During January to April 2018 , legwear exports from India to the USA jumped massively by 144.53 % in volumes while values upped by 40.04 % over the last year

at around 70 per dollar level for the next few months . This can offset the loss of duty drawback to some extent and may see a growth of three-to-five per cent in exports ,” reasons Jaspal .

REDUCTION IN DUTY DRAWBACK A ROADBLOCK …

In the meanwhile , on one hand , there is a substantial cut in duty drawback for Indian exporters , and on the other , stiff competition from countries such as Bangladesh and Vietnam , both of which get tax incentives in addition to export incentives . “ We specialised in kidswear and there are good orders in the market but the issue is of price as due to reduced duty drawback rates , now we are less competitive and buyers are exploring more