Textile sector apprehends dip in export revenues by 6.3%

Kolkata, Apr 26 (UNI) The textile industry, one of the largest employment generators in India, has reported a 6.3 per cent dip in exports growth due to rupee appreciation.

Apparel Export Promotion Council(AEPC) Chairman Vijay Agarwal expressed his concerns over the appreciation in the value of rupee in a letter issued to the Textile, Commerce and Finance Ministers.

''Export receipts of apparel exporters decreased from Rs 20,484 crore in the first half of 2006-07 to Rs 19181 crore during second half of the year, given the same rate of exports. This is a dip of 6.3 per cents in export revenues,'' he said.

An Apparel Export Promotion Council release said today that exports have actually started falling in 2007. The first actual decline in exports to US was reported in January 2007. The trends in exports to US is an important indicator of the overall health of the sector as it accounts for 35% of apparel exports from India.

''February 2007 has seen 2.9 per cent decline in exports to US in quantity term. This could be largely contributed to the 1.05 per cent appreciation in rupees during February compared to January, 2007,'' the release said.

''The appreciation is detrimental to the exporters, it makes the exports costlier forcing suppliers to move to lower cost sourcing destinations or shifting the imports from India to lower value goods,'' he said.

''Shifting to low cost suppliers by importers was logical given the fact that the rupee appreciation comes at a time when most of our competing countries have witnessed currency depreciation,'' he mentioned.

Mr Agarwal said, ''The currency appreciation loss is usually borne by the exporters, at the cost of reducing profit margins, which are already low for the apparel exporters. The exporters are already burdened with disadvantages like rigidities in labour laws that restrict the garment industry to SMEs, high transaction cost that negates other cost advantages available to the sector and infrastructure weaknesses which have been infusing production inefficiencies in clothing industry.'' On behalf of the textile industry, Mr Agarwal has urged the government to help curb further appreciation of rupee to ensure restoration of competitiveness of the industry and fulfilment of export targets.

The industry also seeks government support for lowering cost of capital and improving infrastructural bottlenecks to ensure long term growth of exports from this sector.

The Apparel Export Promotion Council(AEPC) is a non-profit company and industry managed organisation. It is an apex agency sponsored by the Ministry of Textiles, Government of India entrusted with the promotion of exports of readymade apparels from India.

UNI