Exports of readymade garments from Tirupur dipped to eight per cent in 2016-17 from 10 per cent of the previous year. Readymade garment exports fell 15 per cent in July compared to a year ago. From October, export incentives will be slashed, including the duty drawback scheme, from 11.2 per cent to around five to six per cent. This, along with rupee appreciation, will be a deterrent to exports.

Exporters feel cut in incentives will reduce price competitiveness of Indian products in global market. The threat is forcing exporters to go slow on orders. From second largest exporter after China in 2005, India has fallen to the sixth position now, behind Cambodia, Vietnam, Bangladesh and Sri Lanka. Soon, India could slip to the ninth position, behind Myanmar and Ethiopia.

At Rs 25,000 crores, Tirupur accounted for 45 per cent of total exports of readymade garments from the country last year. Exports fell short of the targeted Rs 30,000 crores with Brexit and subsequent fall in the pound value upsetting exporters calculations. Trade has already seen export revenue fall in the first five months due to confusion over GST.