In these tough times, when international businesses are getting strangulated, the survival of Indian apparel export has come under risk.
In line with this crisis, about 65 per cent of apparel exporters’ payment amounting to around US $ 2 billion (about Rs. 15,300 crore) is currently stuck with foreign buyers since overseas buyers and buying houses are now either cancelling or postponing confirmed export orders.
Sakthivel, Chairman, Apparel Export Promotion Council (AEPC), said “With lockdowns across markets, foreign buyers are postponing orders, and asking for hefty discounts. Goods in transit goods are also not moving. Besides, the goods dispatched are also not finding any takers on different foreign ports.”
KL Magu, MD, Jyoti Apparels also opined that most of the exporters’ bank deposits today stand exhausted. “Foreign buying houses have also not paid for the 2-3-month-old shipment, leading a huge blow to cash flow,” Magu said.
While talking to a media house, various manufacturers disclosed that the foreign buyers are not lifting deliveries which have already reached their ports.
Sakthivel further said that such cancellations and postponement of shipments are resulting in packing credits being eroded. Apparel products are tailor made, design-specific and fashion-specific and are perishable and any cancellation at this stage would make them redundant with little or no salvage value the next year.
Not only internationally, manufacturers are being advised to not cut, stitch and sew any fresh items even for domestic clients during this period.
Rajendra Agarwal, Managing Director, Donear Industries Ltd., has also confirmed that there has been postponement of deliveries from brands like Blackberry, Madura Garments, ITC, etc., as well.