India has reported only a marginal five per cent growth in apparel exports for the April to July 2017 period. Despite significantly higher raw material prices, revenues of fabric manufacturers grew a modest four per cent in the first quarter of 2017-18 pointing towards a steeper fall in sales volumes vis-a-vis production volumes.

The country’s apparel exports are likely to see only a marginal single digit growth this year, due to GST, rupee appreciation against the dollar, rise in raw material prices, increase in labor wages as well as poor global demand.

Global apparel trade has also shown no signs of revival, due to poor demand in key importing countries, which could affect India’s apparel exports. Incidentally, the Indian rupee rose to 64.2 against the dollar from 66.5 last August, which is in contrast to six consecutive years of depreciation.

The apparel and fabric industry has been facing headwinds as a result of temporary disruptions caused by demonetisation and the transition to GST regime. The impact of these developments has been more pronounced on the highly fragmented fabric segment, with fabric production declining by one per cent in the first quarter of 2017-18 following flat production in 2015-16 and a two per cent decline in 2016-17.