Even as overall exports from India have continued to grow, albeit at a slower pace, garment exports have gone deeper into the red.
According to the latest data by the Apparel Export Promotion Council (AEPC) here on Wednesday, garment exports during July were down by as much as 22.5 per cent. In absolute terms, these have come down to $816 million from $1,053 million during the corresponding month last year.
The drop is on top of a 13.6 per cent decline in June [to $833 million from $964 million] and a 6.8 per cent drop in May [to $820 million from $880 million].
With this, the sector has registered a slowdown of 8.09 per cent for the first four months of the current fiscal — from $3,769 million to $3,464 million.
Target
Releasing the data at a press conference, AEPC Chairman Premal Udani expressed doubts whether the sector would be able to achieve the export target of $12 billion set for this year.
“We will surpass last year's export performance of $10.72 billion.
“But, I am not sure whether we will be able to achieve this year's target''.
Blaming higher prices of cotton yarn for the downtrend, he urged the Centre to ensure that export of raw cotton and yarn were calibrated in such a way that there was no disruption of supply to garment producers.
He alleged that the announcement by the Directorate General of Foreign Trade that cotton would be allowed for exports from October and reports that 30 per cent of cotton crop in Pakistan could have been lost because of the recent floods have already led to sharp increases in the prices of cotton and yarn.
“Yarn mills have once again stopped deliveries and are talking about a minimum increase of Rs.10 a kg in the price for September delivery''.
Exporters were not able to compete with China and Bangladesh as, though they also paid high prices for cotton, they enjoyed significant advantages by way of government support on infrastructure, subsidies, wages and foreign exchange rate control, it added.
Mr. Udani released a common compliance code of ethics for the garment sector. The code identifies all legal requirements, including those forbidding child labour, and sets out standards in terms of freedom of association for the workers, hours of work, wages and other benefits and other issues.
