By K Ashwin Mobile: 09920183006 Email:firstname.lastname@example.org
The pace of growth in India’s apparel exports is likely to remain contingent upon the industry’s ability to overcome the internal as well as external headwinds that the industry is presently facing. According to a recent ICRA report, while transition to the new taxation and export incentive regime has posed liquidity challenges for the industry, intense competitive pressures in the global market, particularly in light of impending trade agreements and foreign currency movements pose additional challenges. In addition, uncertainty on the apparel exports to the UAE looms, in light of inexplicable trends witnessed in the recent months.
Says Mr. Jayanta Roy, Senior Vice-President and Group Head, ICRA, “The accommodative stance taken by the government by way of upward revision in export incentives in November 2017, has addressed one of the issues that the segment is facing. However, sustainability of growth remains contingent on how the scenario on the other fronts pans out.”
As per ICRA, post upward revision in export incentives, India has reported a 6-20% Y-o-Y growth in apparel exports to key nations such as the US, the UK, Germany, France and Spain during the period Nov-Dec 2017. However, despite this, the overall apparel exports are down by 1% Y-o-Y in 10M FY2018. The decline has been primarily driven by the sharp decline in exports to the UAE market. UAE had emerged as one of the prominent apparel export destinations for India, with its share increasing to ~23% in FY2017 from ~12% in FY2014. Particularly for the ten-month period ending June 2017, India’s apparel exports to UAE had grown at a sharp pace (56% Y-o-Y). Thereafter, apparel exports to the UAE have fallen at an equally fast pace, by as much as 45% since June 2017. Excluding the trade with the UAE, India’s apparel exports are estimated to have stood 3-4% higher in 10M FY2018. Read more