Falling Indian rupee lifts fortunes at textile, garment cos

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Vardhman Group, which is running at full capacity, is also expanding, while Jyoti Apparels is expecting a 15% rise in its order book this fiscal. (Reuters) Vardhman Group, which is running at full capacity, is also expanding, while Jyoti Apparels is expecting a 15% rise in its order book this fiscal. (Reuters)
SummaryA weak rupee, may not be bad for everyone.

rise further due to the rupee depreciation and a steady rise in orders, executives said.

Overall textile production, however, gained 2.9% between April and June, showed the Index of Industrial Production data, suggesting domestic demand likely remained subdued while exports contributed much to textile sector growth.

Interestingly, the rupee depreciation has also prompted some buyers to shift from China and Bangladesh to seek better bargain on their purchases from India in dollar terms, said HKL Magu, managing director of Jyoti Apparels.“One reason textile exports respond well to the rupee depreciation is the very low import content in the segment. Exports of cotton yarn, fabric and made-ups are doing very well,” said DK Nair, secretary-general of the Confederation of Indian Textile Industry.

However, the government’s ambitious target of raising textile and garment exports to close to $44 billion in 2013-14 will be missed in the absence of any major policy intervention in the form of higher export subsidy or availability of adequate and cheaper credit, some industry executives said.

The country’s overall textile and clothing exports, which also include shipments of cotton (raw and waste) and handicrafts, had hit Rs 1,59,570.56 crore ($34 billion) in 2011-12, up 26.4% from a year before. The government had set a $40.59 billion target for such exports for 2012-13 fiscal, which was missed.

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