Falling rupee, boon for Indian textile exporters
Updated: Sep 04, 2013 02:58:16pm
New Delhi, Sept 4 (KNN) A weak Indian rupee has proved to be good news for the country's textile sector, with exports from the sector expected to grow by as much as 15 per cent in the current fiscal.
The Western markets are finding it more profitable to look to the Indian market for imports as the currencies of neighbouring countries like Sri Lanka and China have appreciated.
The main importers of Indian textiles and garments are western countries such as US and Europe.
Previously, the Indian rupee had elevated to such an extent that it made Indian goods more expensive globally, benefitting competitors such as Bangladesh, Sri Lanka, Pakistan and China.
Currently, China, Sri Lanka and Bangladesh are facing increased prices in raw material and escalating labour costs, which are hitting their exports.
The lower cost of raw material and labour in India coupled is helping labour-intensive sectors such as textile, leather, handicrafts or tea which are making profits due to rupee fall and witnessing a sudden rise in export orders.
Although both the Bangladeshi taka and the Indian rupee are now almost the same denomination value against the dollar, the rupee’s depreciation is posing a threat to the Bangladesh’s orders being diverted to India due to India’s own cotton production which will make the Indian products cheaper.
“India and China had a gap of 10 to 15 per cent in textile export, but now, the gap will reduce,” said Aditya Gupta, from Sharda exports.
“Though we are not able to commit to the customers much due to high volatility in the rupee, the textile sector is benefiting from the situation. The demand has also gone up in the last few months. As we don’t import our raw materials much from outside, the profit margin is also more,” Gupta said.
On the other hand, in Punjab, the textile industry is uncertain about taking new orders due to the fluctuating value of rupee.
“In Punjab, the policies are not at all favourable to businessmen; textiles is the most ignored sector,” said General Secretary of the Northern India Chamber of Commerce and Industry Dheeraj Gupta from Ludhiana.
“The importers are also waiting for the rupee to improve to place new orders. Though we have got the benefit from the depreciating rupee value, the raw material costs and labour costs are going up at present,” Gupta added.
Textile and garment shipments accounted for 10.54 per cent of India’s overall exports in 2012-13.
It contributes about 14 per cent to the industrial production, 4 per cent to the GDP and 11 per cent to the country’s export earnings. The textile sector is the second largest provider of employment after agriculture.
India’s overall textile export is at USD 31.7 billion, after a 5 per cent drop in the last fiscal through March. (KNN/SD)
The Western markets are finding it more profitable to look to the Indian market for imports as the currencies of neighbouring countries like Sri Lanka and China have appreciated.
The main importers of Indian textiles and garments are western countries such as US and Europe.
Previously, the Indian rupee had elevated to such an extent that it made Indian goods more expensive globally, benefitting competitors such as Bangladesh, Sri Lanka, Pakistan and China.
Currently, China, Sri Lanka and Bangladesh are facing increased prices in raw material and escalating labour costs, which are hitting their exports.
The lower cost of raw material and labour in India coupled is helping labour-intensive sectors such as textile, leather, handicrafts or tea which are making profits due to rupee fall and witnessing a sudden rise in export orders.
Although both the Bangladeshi taka and the Indian rupee are now almost the same denomination value against the dollar, the rupee’s depreciation is posing a threat to the Bangladesh’s orders being diverted to India due to India’s own cotton production which will make the Indian products cheaper.
“India and China had a gap of 10 to 15 per cent in textile export, but now, the gap will reduce,” said Aditya Gupta, from Sharda exports.
“Though we are not able to commit to the customers much due to high volatility in the rupee, the textile sector is benefiting from the situation. The demand has also gone up in the last few months. As we don’t import our raw materials much from outside, the profit margin is also more,” Gupta said.
On the other hand, in Punjab, the textile industry is uncertain about taking new orders due to the fluctuating value of rupee.
“In Punjab, the policies are not at all favourable to businessmen; textiles is the most ignored sector,” said General Secretary of the Northern India Chamber of Commerce and Industry Dheeraj Gupta from Ludhiana.
“The importers are also waiting for the rupee to improve to place new orders. Though we have got the benefit from the depreciating rupee value, the raw material costs and labour costs are going up at present,” Gupta added.
Textile and garment shipments accounted for 10.54 per cent of India’s overall exports in 2012-13.
It contributes about 14 per cent to the industrial production, 4 per cent to the GDP and 11 per cent to the country’s export earnings. The textile sector is the second largest provider of employment after agriculture.
India’s overall textile export is at USD 31.7 billion, after a 5 per cent drop in the last fiscal through March. (KNN/SD)
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