Apparel exporters see another threat

When all focus is on plummeting rupee against dollar, another major threat is looming large over apparel exporters here that in the form of heavy depreciation in the local currencies of certain foreign countries in emerging market that source apparels from India in ‘US dollars’.

This monetary scenario’s cascading effect is that the profitability of apparel exports from India had started affecting severely as the overseas buyers from such countries, where local currencies are falling, demand heavy reduction in garment prices to offset the shelling of more local currencies to buy dollars for purchasing garments from India.

“Already, apparel importers from countries like South Africa, where the local currency Rand has depreciated sharply against US dollar, have carried out heavy negotiations with few exporters here and managed to get discounts up to six per cent even on the ‘orders under process/execution’ leave alone fresh orders,” R. Girish, an apparel exporter and founder-member of Tirupur Exporters and Manufacturers Association, pointed out.

Fresh orders

He added that many buyers were asking for 10 per cent discount for fresh orders. “The reason for buyers from countries like South Africa, Mexico and others, where the local currency itself depreciated, asking for reduction in selling prices is because of the unsteady monetary situation in India. Exporting fraternity in Tirupur is reiterating the need for a stable currency here first through RBI’s interventions so that they could fight against currency fluctuations in emerging markets abroad with confidence.

“We need to take a leaf out of China where correction in currency value happens at least once in a while,” Raja Shanmugam, an exporter and senior member of Tirupur Exporters Association, said.

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