Global brands want Indian apparels at pre-Covid rates. On their part, Indian apparel manufacturers have started looking for markets in Japan, Australia and Latin America
With the rupee depreciating against the dollar and cotton prices falling 15 per cent, Indian apparel manufacturers have been facing a tough global market. In fact, the recession in US and Europe have prompted international brands to negotiate with Indian exporters. These global brands want Indian apparels at pre-Covid rates. On their part, Indian apparel manufacturers have started looking for markets in Japan, Australia and Latin America.
Narendra Goenka, Chairman, Apparel Export Promotion Council (AEPC) was quoted by ET saying that “cotton prices have dropped by 15% from the high of Rs 1 lakh per candy (356 kg)”. Rates were supposed to drop down further in the coming weeks, according to Goenka.
According to Raja M Shanmugham, President, Tirupur Exporters Association (TEA), the “global buyers now want garments at the pre-covid prices”. For a product that was sold at $7 this year due to high cotton prices, the global brands were demanding that it be given at $5: that was the price in pre-covid times.
A decline of export orders up to 10 per cent for Spring 2023 was expected. That is why Indian garment exporters were looking at the Japan, Latin America and Australia markets to “make up the expected losses”,
— Raja M Shanmugham, President, Tirupur Exporters Association
Also with the depreciation of the rupee, foreign buyers were demanding more. “Despite rupee weakening, we cannot give such a huge discount because cotton prices have not come down to the 2019 level. At best, we can offer a price which is 15% lesser than what we are offering now,” Shanmugham told ET.
In fact, Goenka from AEPC was of the opinion that the recessionary trends in the US and Europe would have deal a blow on Spring 2023 orders that are manufactured and shipped between October to March. A decline of export orders up to 10 per cent for Spring 2023 was expected. That is why Indian garment exporters were looking at the Japan, Latin America and Australia markets to “make up the expected losses”, he said.
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