Apparel Online India Magazine October 1st Issue 2018 | Page 8

MIND TREE
Q-and-A
The Indian rupee has been depreciating as it is somewhere at 72.36 against 1 US dollar, a
never before variation. As rupee loses 12 per cent this year, it becomes currently one of Asia’s
worst performers. Being an exporter, is this fruitful to you or not, considering the buyer negotiates
price taking into account rupee’s falling position? Are you hedging in this circumstance? If yes,
then for how much period? Overall, how do you perceive this crash of rupee and its impact on
your business?
Harish Ahuja, MD,
Shahi Exports, Faridabad
The depreciation of rupee is
benefiting the country in the
sense that we are getting more
orders compared to what we
were getting earlier as most of
the exporters are now able to
book more orders due to this
recent sliding of the rupee.
For once, we have become
comparatively little more
competitive as in this way, the
weaker rupee has proved good
for the economy. Due to this
currency development, Shahi
Exports is also able to book
more orders.
The depreciation of the
rupee has been only against
the dollar, not against other
currencies. So, export from the
country in dollars is around 40
per cent and with this bracket,
we can grow in a good way.
Raja Shanmugham,
President, TEA, Tirupur
Currency depreciation is not
only in India but in few other
garment-producing countries
too, and so Indian exporters
can’t get too much benefit due
to currency development. Buyer
– the smartest stakeholder in the
entire supply chain – does ask
for bonus money in such a case;
especially in repeat orders, one
can’t expect a single penny
more from the buyer.
With regard to hedging, I would
insist that if any fellow apparel
exporter is going to hedge, it
should go for at least one-year
period, then only hedging
will benefit properly. So far,
my experience on hedging
very strongly says that in such
scenario, hedging for at least
one year is a must. Every
exporter has more or less idea
about the dollar inflow, so such
planning is not a big issue.
HKL Magu, Chairman,
AEPC, Gurgaon
No doubt that the depreciation
of rupee will be beneficial to
us for further order booking.
Most of the big exporters have
already hedged their currency
and they got 67 or 68 rupees
against a dollar. Hedging for
the long run will be a benefit
as they will be hedging it for 75
rupees after one year or maybe
74 rupees after six months.
But we have to keep in mind
that only 50 per cent exporters
hedge as small exporters don’t
bother about hedging and
they even don’t know deeply
about its various aspects.
It is very much true that buyers
do ask to adjust this benefit
but not each and every buyer
asks to do that. Big buyers or
top stores, having their offices
in India, definitely ask for
this adjustment. But they do
understand that this currency
8 Apparel Online India |OCTOBER 1-15, 2018 | www.apparelresources.com
up and down is in nobody’s
hands and it will carry on. So
overall falling rupee will benefit
all of us.
Though imports become costly
due to depreciating rupee,
whatever is imported for or by
apparel exporters is not more
than 2 to 3 per cent of their
business, and that too in trims
and accessories. Therefore,
import as such is not having any
impact in this regard; besides
majority of the industry is using
indigenous fabric.
As far as my company Jyoti
Apparels is concerned, till
date, we have not made
much profit because we have
already hedged the currency.
But going forward, I think that
we will be benefiting to the
extent of Rs. 30 to 40 lakh.
We do hedge around 30 to
40 per cent.
PMS Uppal, MD, Pee
Empro Exports, Faridabad
This is good for overall export
industry, and I strongly feel
this situation will benefit more
particularly the small- and
medium-level exporters. We as
an organisation have a target
to grow at the rate of 20 per
cent and consistently achieve
this target. As far as hedging
is concerned, it is quite an
individual thing and I must say
that if someone is not aware
about all aspects of hedging,
he should take the services
of experts.
Vijay Jindal, SPL
Industries, Faridabad
Indian rupee is not dying as
it is being presented. Our
neighbouring countries that
are our competitors also,
have seen their currencies fall
against the dollar. Definitely,
Indian exporters will have some
gain from this. One may say
that buyers keep this currency
development in mind during
price negotiation, but I feel that
all gains by the weak rupee will
not be passed on to the buyers.
Hedging is a very complicated
issue as no one can rightly
predict about its result, so
nobody can give proper
suggestion on this. It is quite
an individual decision. As far
as my opinion is concerned, I
preferred to hedge 50 per cent
of our total sale.
Lalit Thukral, President,
Noida Apparel Export
Cluster, Noida
Whenever rupee appreciates
or depreciates, it has the
reverse effect on the industry.
Temporarily we think that
we save small amounts,
but it doesn’t take place in
reality. One gets little benefit
in some payment, while in