Apparel exports are expected to decline by over three per cent to USD 10.2 billion in 2010-11 year-on-year, due to the higher cost of fabrics in the local market.
“The rising prices of cotton yarn have impacted garment exports. The increase in cost of apparels has shifted foreign buyers to other neighbouring markets like Bangladesh and Vietnam, which are cost-effective,” Apparel Export Promotion Council (AEPC) Secretary General Vimal Kirti Singh told PTI.
The US and EU are the major market for India’s apparel exports, accounting for about 80 per cent.
According to industry experts, the prices of cotton yarn have increased by 40 per cent in the past three months thus increasing the fabric cost.
To cool down increasing prices of yarn in the domestic market, the government has capped the cotton yarn exports to 720 million kg for the current fiscal.
India’s garment exports stood at $ 717 million in October compared to the same period last year, according to AEPC data.
India’s apparel exports were on the decline till July this fiscal. However, they have exhibited positive growth since August.
During the first seven months of the current fiscal, the garments exports declined by six per cent to $ 5.7 billion compared to the same period last year.
The garment industry provides employment to about 7 million people in the country, out of which almost half are engaged in the export sector.