The United Arab Emirates (UAE) has suddenly become the biggest destination for readymade garment exports from India. India’s readymade garment exports to the UAE shot up 17.8 per cent for the first four months of this financial year. Comparatively, top export destination till now, United States, saw only a 1.5 per cent growth in Indian shipments. In fact, none of the other top 27 large apparel exporting countries saw any significant jump in shipment.

The Apparel Export Promotion Council has launched a fact finding mission. In fact, over the same period, RMG exports from India to the UK, Germany and France too saw a fall. Exports to the UK fell 0.8 per cent from a year ago; Germany and France saw a larger fall of 2.6 per cent and 14 per cent. The trend of the UAE outperforming these destinations defies logic.

These figures apart, the Indian apparel industry has been under stress for varied reasons. Most neighboring countries have FTA with Europe and so, Indian exporters are outpriced. Second, the currency has strengthened, while competing currencies have weakened. In addition, the duty drawback and the rebate on state levies schemes have stopped since October.

Against this background there has been another puzzling trend. September’s readymade garment exports grew 25 per cent as against a declining trend in the previous months. Almost no large apparel exporter has seen any substantial rise in their exports.