Sources have revealed to Apparel Resources that Ministry of Textiles (MoT) has given a target of US$ 20 billion to the Apparel Export Promotion Council (AEPC)for the financial year 2016-17, while AEPC had already set target of US $ 18.75 billion for same fiscal against the probable performance of US$ 17 billion in the financial year 2015-16.
To achieve the proposed target a growth of 18.34 per cent is required, which is a difficult task considering that in the last fiscal export from India grew only 1 per cent in US Dollar value and by 8 per cent in Rupee term. Not only that, there are many more challenges like 14 of India’s top 20 destinations has shown a decline in export this year and the European Union, which is the largest destination for Indian apparel exporters has shown a decline of 7.6 per cent and even the last quarter has shown a decline. Moreover, it is believed that after signing of TPP, Vietnam is one of the signatory and India may lose its competitiveness in the US market.
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It is strange that despite all these challenges, industry expert feels that India could reach this ambitious target, thanks to the hopes of trade agreements. Prabhu Dhamodharan, Secretary, IndianTexpreneurs Federation (ITF), Coimbatore suggest that MoT should break the target numbers cluster-wise and work closely with industry to overcome these challenges to achieve this target. Overall, the trend is positive among apparel manufacturing clusters. He, too, seems positive and says that for the past 2 years, many apparel companies are growing at the rate of 15 per cent in the south region.
“Orders are flowing now in large volumes, thus, many corporates in Tamil Nadu textile cluster are confident about repeating the same growth pattern in current year,” he says and adds that long prevailing problems like shortage of human resource and infrastructure bottlenecks, reduced margins due to hectic competition from others, very low numbers of new entrants in the business and expansion of only existing companies are major concerns.
“Despite all the challenges, we are confident that early signing of FTA with EU, CECA with Australia, CEPA with Canada will help to increase our export growth by 30 per cent and in such case, we would reach the Textile Ministry’s target of US$20 billion in 2016- 17,” opines A. Sakthivel, President, ,Tirupur Exporters Association (TEA).
Furthermore, Dhamodharan adds that they are receiving more queries about the blended garments and they are not able to capitalize the fastest growing segment due to less competitiveness in man-made fibre (MMF) sector and lack of effective processing facilities in this segment. However, in order to maintain the same trend, they specified five focus areas like more FTAs, market diversification, duty rationalization of MMF, increasing efficiency in manufacturing and moving up the high-value products to manage the increasing costs.
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