INDIA: Garment Exporters Bank on Rising Yuan for EU Gains

Indian apparel exporters are desperately waiting for Spring 2009. After seeing business stagger last year in an uncertain US market, apparel exporters are eyeing European Union to drive volumes in 2008-09 as it begins sampling for Summer 2009. With its nearest competitor China struggling with an appreciating Yuan, Indian garment exporters expect to bag substantial orders from EU.

India’s exports to the EU have been rising exponentially. From 2005-06 when it did $1,661-million business, it jumped by more than 140% in 2006-07 and exporters churned out business worth $3,996.1 million from EU alone. While India struggled with exports to the US, EU imported $1,088.2 million RMG. According to Apparel Export Promotion Council, Indian exports to the EU in January 2008 vis-à-vis January 2007 grew by 2.8% when China saw it fall by 1.1%.

Unlike the US, which is a mass market, the EU is a very demanding niche brand market. Exporters are now ready with apparel samples in chic, classic, and casual shades that will hit retail shelves across Europe in Spring 2009.

Apart from an appreciating currency, Chinese exporters are faced with 25% hike in wages in the textile sector and lack of export subsidies.

Source: Financial Times