Recession has struck the US economy quite badly. This is quite apparent from the available statistics which shows, apparel imports by the country have plummeted by nearly 4.15 percent between January and August 2008 to US $47 billion from $49 billion of the prior year.
This backlash of US economic downturn is hurting Indian garment exporters. Lower demand from the US and fear of closures of few of the importing companies has created a lot of confusion among the exporters as around one-fourth of the country’s total garment exports goes to the US.
Such situation has aggravated a fear of non payment, and abandonment of export orders among Indian garment manufactures, thus they have started focusing on various other countries.
In an exclusive interview with Fibre2fashion, Mr Rahul Mehta, President, Clothing Manufacturers Association of India (CMAI), shared his views on meeting export targets under the crucial situation, where in he told, "I think the question of meeting our export targets has long been forgotten. There is no hope of achieving these. What the current crisis has done is to neutralize the advantage that could have accrued due to the weakening of rupee.
"Unfortunately today we are in a situation where although we may be theoretically competitive, there is a sense of panic, uncertainty, and lack of confidence amongst our buyers. Their own solvency is a question mark. I personally see a grim future in the coming months for the apparel industry."
Further discussing the current scenario in domestic market, Mr Mehta stated, "The Domestic scene is perhaps better than its exports counterpart, but only marginally so. Till the recent collapse of financial markets around the world, it was felt that the impact on Indian economy would not be as brutal, and hence there was optimism that apart from the few industries directly dependent on exports, the domestic growth story would continue – with a couple of hiccups along the way.
"However, with our own markets and exchanges being hit as badly as any other, the sentiments in the consumer mind is at a terrible low, and I expect the domestic sector also to show significant slowdown."
While talking about Indian clothing market scenario as big retail brands are introducing overseas brands in India, and joint ventures with foreign retailers, the CMAI President stressed, "I do not see the Indian Retailers or Manufacturers throw in the towel to foreign entrants. I am confident that the sheer size, complexity and the variables of the Indian markets will ensure that there is sufficient scope for everyone to survive and grow.
"There is a beginning seen in the joint ventures involving Indian manufacturers and foreign retailers, but frankly, it is early days yet, and barring a few, no significant tie ups have been announced.
Source: www.fibre2fashion.com
