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The Southern India Mills’ Association

Committed to Foster the Growth of the Textile Industry

Exports fall, apparel exporters shift focus to domestic market

Perturbed over continuous decline in apparel exports from the country due to intense competitive pressures in the global market, Punjab-based apparel exporters are now shifting focus to domestic market. According to the industry, around 30-40% of the exporters have already started utilitising their partial or full capacity to cater to the domestic market.
The apparel exports from the country are on continuous declining trend since October 2017. The industry saw declining numbers in October, November, December 2017, January, February and March 2018 – a fall of 41%, 14%, 13%, 14%, 14% and 19% year-on-year, respectively, mainly due to stiff competition, slowdown and the discontinuation of certain export incentives.
The country’s apparel exports in 2017-18 were to the tune of Rs 1,07,699 crore, posting a fall of 7.60% as compared to the same period of the previous fiscal. During 2016-17, India’s apparel exports was to the extent of Rs 1,16,554 crore.
Compared to other states, the impact in Punjab, Haryana and Uttar Pradesh is in double digits as the input costs are higher.
“The dwindling exports have made it very difficult to survive. There are around 450 apparel exporters in Punjab and around 40-50% of them have shifted focus to domestic market. We have also shifted 50% of our production capacity to cater to the domestic market,” said Harish Dua, managing director of Ludhiana-based KG Exports.
The domestic market is pegged at around Rs 3.25 lakh crore and it is almost three times more than the exports market. However, there is a catch to it. Manufacturers having only deep pockets can sustain in the domestic market.
Narinder Chugh, managing director of Ludhiana-based Million Exporter (P) Ltd., said, “In the absence of government support at this time, the exporters have no choice but to serve the domestic market in order to sustain. We are also planning to foray into domestic market and are in discussion with various MNCs for outsourcing.”
Exporters say the decrease in duty drawback rates has made the Indian exporters uncompetitive as compared to other countries. Also, strengthening of Indian rupee against the US dollar has impacted the exporters. Countries like Bangladesh, Vietnam, China, Pakistan and Myanmar are posing major threat to Indian exporters as their products are more competitive than those of Indian exporters.