NEW DELHI: After seeing a fall for
three months in a row, ready-made garment (RMG) exports rose by 25 per cent in
rupee terms and 30 per cent in dollar terms in September.
But exporters say this will not be sustainable since Government
policies are not favourable.
RMG exports rose to Rs 10,707 crore in September 2017 from Rs
8,583.55 crore in the same month a year ago.
In dollar terms, these figures were $1.662 billion as against
$1.284 billion.
Of the total RMG exports, 52 per cent is woven and 48 per cent is
knitwear.
The sector started the year in April with 27.60 per cent growth in
rupee terms and a 31.65 per cent increase in dollar terms. But in the following
month growth (in rupee terms) was only 3.84 per cent.
Exporters say that garment exports this year will surpass last
year’s total exports of $17.358 billion as, generally, exports tend to grow in
the second half.
January to March are the crucial months for RMG exports. Around
30-40 per cent of exports have taken place during these three months in the
last few years.
Exporters attributed the increase mainly to the upcoming Christmas
season in Western markets. The other factor is that inventories piled up due to
the GST are now being cleared. Tirupur Exporters’ Association President Raja
Shanmugam said that people are now becoming used to the system. In the last
three months while global demand was increasing, exporters could not cater to
it due to tax-related confusion. “Now we don’t have a choice, but the GST makes
our products costlier compared to other countries,” said Shanmugam. He added
the September numbers are not sustainable in the current environment.
Another exporter agreed and said unless India signs an FTA with
European countries exporters will be in deep trouble. Competing nations have a
duty advantage, which India does not possess.
Customers have also started asking for a reduction in price after
the rupee started strengthening against the dollar. This comes at a time when
the cost of doing business is going down for exporters.
Source: Dailyshippingtimes.com
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