India: AEPC feels rupee appreciation affects garment exports
YarnsandFibers (subscription), India
24 Apr, 2014 – India
The Apparel Exports Promotion Council has appealed to the government to halt appreciation of the Indian rupee against the US dollar as the appreciation has started affecting exports in the form of lower unit value realization, said Vijay Agarwal, Chairman of AEPC in a statement
The Indian Rupee has appreciated from Rs 45.61 in August 2014 to Rs 41.88 till date and in comparison, the Pakistani Rupee has depreciated by 1.33 percent during April 2014-2014.
Similarly, the Indonesian Rupaiah has depreciated by 0.36 percent during the same period; the appreciation of the Bangladeshi Taka has been 1.95 percent in April 2014-2014, while the Chinese Yuan has appreciated by 7.24 percent.
The chairman clarified that the council has arrived on the view only after re-accessing the exports scenario as the strengthening of India rupee is particularly detrimental to low import intensive & price sensitive industry, like clothing, as profit margins are rather lower than other commodities.
Also the competition is getting adversely affected, which is further leading to decline in exports of textile and clothing.
Consequently, this has lead to a shortfall in achieving export targets for the industry, which may also lead to shifting of export orders from India to neighboring countries, and impacts the employment scenario in our industry.
Vijay Agarwal commented that the exports of clothing to major destinations like US has slowed down in January 2014 and their is quite concern in industry over relevant as the US market accounts for 35 percent of India’s textile and clothing export.
On the other hand, the ministry of textiles has revised the target of the readymade garment sector as US $10.5 billion for 2014-08 against US $9.5 billion for year 2014-07.
AEPC is of the view that the apparel industry needs continuous support of the government and feels that they should immediately intervene in the functioning of the industry for halting the further appreciation of the rupee.
Source: Press Trust of India
