October 2019 Edition Apparel October 2019 issue | Page 84

INDUSTRY INSIGHTS
DESPITE THE OVERALL DECLINE
IN CORE SECTORS AND
ECONOMIC FIGURES, SOME
INDUSTRIES ARE SHOWING
SIGNS OF HOPE, ONE OF THEM
BEING MANUFACTURING.
with global economic systems. And while that has
led to unprecedented growth, it has also come
with its own set of vulnerabilities. In the wake
of global trade wars, technological disruptions,
climate crisis, and numerous other turbulent
events, international business is also at risk of
slowdowns. And this has the potential to directly
impact Indian economic interests.
IMPACT ON APPAREL
Despite the overall decline in core sectors and
economic figures, some industries are showing
signs of hope, one of them being manufacturing.
So while 11 of the 23 manufacturing segments
faced a decline during the period of April–June
year over year, the slim majority has managed to
dodge this trend. These segments include food
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I APPAREL I
October 2019
production, steel, and apparel, which have grown
steadfastly despite challenges. While the apparel
sector was in an early decline of five per cent
during the first quarter of the last fiscal year, it has
now found a way to buck the trend.
Total apparel exports during April–June 2019
were nearly US$4.2 billion (R29,000 crore), which
saw a seven per cent-rise in the rupee and a
three per cent-rise in the dollar over the previous
year. But despite this overall positive growth, the
June period started to exhibit a decline as per
data from the Ministry of Commerce and Industry.
In general, the future of the apparel industry is
precarious with far too many obstacles, what with
challenges such as environmental issues and
resource constraints being stacked with others
like falling consumer demand, uncertainty due
to trade wars, and rising competition from
regional counterparts.
Amidst this fierce environment, Indian apparel
has been able to fend off the worst of this
slowdown by making gains in exports. The start
of the fiscal year showed gains of about seven
per cent coming in from burgeoning exports in
the US market, which was able to hold off its
three per cent-decline in the markets of Europe
and the United Kingdom (UK) during the same
period. This was caused by a slowdown in the
European Union (EU) demand as they underwent
currency depreciation against the US dollar. In
addition, Indian trade took a hit in the region due
to the preferred deals the EU has with India’s
competitors through free-trade agreements
(FTA), with the most recent being the 11-nation
Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP) and EU-
Vietnam Free Trade Agreement (EVFTA). These
preferred agreements are already having an
impact on the Indian apparel industry, and are
threatening India’s apparel export—which comes
up to 35 per cent—in the EU.