Skip to main content

India's apparel exports fall by 17% in Q1 FY19 due to slowdown in demand

By
A slowdown in demand from developed countries; Indian exporters urge the government to sign 
India’s apparel exports are estimated to have declined by 17 per cent in the first quarter of FY19 due to a slowdown in demand from developed countries following weak economic activity there.
Data compiled by the apex industry body, the Clothing Manufacturers’ Association of India (CMAI), showed India’s apparel exports at Dollar 1.35 billion and $1.34 billion in April and May 2018, a decline of 23 per cent and 17 per cent respectively. During FY18, apparel exports from India fell by 4 per cent to Dollar 16.72 billion.
Starting in June 2017, after the goods and services tax (GST) was implemented, and resulted in the blockage of working capital due to delay in refund of state levies and other mandatory refundable taxes, the slowdown in overseas pick continued till the first quarter of the current fiscal.
“India’s overall apparel exports are estimated to have declined by 17 per cent in the quarter between April – June 2018 due to depressed economic conditions-led lower demand and growth. Consequently, Indian domestic market performed better during the first quarter of the current fiscal than the largest consumption regions like United States (23 per cent share in India’s overall apparel exports),
European Union (38.4 per cent share) and Japan (1.1 per cent share),” said Rahul Mehta, President, CMAI, while announcing the 67th National Garment Fair, India’s largest apparel trade show, scheduled to be held between July 16-19.
India fully WTO compliant, doesn't subsidise exports: Suresh Prabhu
India’s domestic apparel market was estimated at $67 billion in 2017 and it has grown at a compounded annual growth rate (CAGR) of 10 per cent since 2005. Owing to strong fundamentals, the domestic apparel market is expected to grow at 11-12 per cent CAGR and reach about Dollar 160 billion by 2025.
“The introduction of GST has resulted in non-refund of several embedded taxes. Consequently, apparel exports for the financial year 2017-18 posted a decline. The downturn continues in FY 2018-19 with a month on month decline of 10 per cent. The government is seized of the matter and has assured that embedded taxes will be refunded through the drawback route,” said Premal Udani, Managing Director, Kaytee Corporation, one of India’s largest kids' wear exporters.
Meanwhile, the apparel industry has raised concerns over the rising import of apparel from Bangladesh, which experts claimed had hit the domestic industry hard. “The imports of textiles and apparel have reported a jump of 16 per cent to touch the highest ever of $7bn for the financial year 2017-18 compared to Dollar 6bn. All the categories across the value chain have seen a drastic rise in imports over the last few years,” said Sanjay Jain, Managing Director, TT Ltd and Chairman of the Confederation of Indian Textile Industry (CITI).
The Business Standard, New Delhi, 09th July 2018

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Healthy balance sheets augur well for economy: RBI Governor Sanjay Malhotra

By
  Large tariffs by the United States administration and elevated geopolitical risk have increased near-term global financial stability risks, and along with weather events pose downside risks to domestic growth, Reserve Bank of India(RBI) Governor Sanjay Malhotra said in the foreword to the Financial Stability Report released today.Noting that domestic growth momentum is buoyed by strong domestic drivers, sound macroeconomic fundamentals and prudent policies, Malhotra said: “External spillovers and weather-related events could pose downside risks to growth.”On the other hand, he said the outlook for inflation is benign, and there is greater confidence in the durable alignment of inflation with the Reserve Bank’s target.Commenting that the structural shifts reshaping the global economy are making policy intervention challenging, the Governor emphasised the need for central banks and financial sector regulators to remain vigilant, prudent and agile in safeguarding their economies and...
Post a Comment
Read more