India’s apparel/readymade garment exports declined nearly four per cent in fiscal ’18. From fiscal ’17 to fiscal ’18, there was a 3.8 per cent decline. The dip happened due to continual month-on-month decline, beginning from a 39.30 per cent fall in October 2017 and ending at 17.8 per cent in March 2018.

Not only is apparel stagnating, it is also heading towards a recession. This clearly indicates an ongoing shrinkage in the industry. Global factors such as free trade agreements of competing nations with key markets like Europe, the UK and the US had already been posting a challenge to readymade garment exporters. GST in July 2017 resulted in blockage of funds for the export community. Further, export incentives such as duty drawback and rebate on state levies were reduced.

Global factors have been rendering Indian exporters uncompetitive. While China vacated the apparel export space, India is unable to encash on the opportunity, unlike Vietnam, Bangladesh or Cambodia, who have FTAs. India is emerging as an expensive affair in the global apparel market. Backed by its duty-free access to the EU market, Bangladesh retains its position as the second-largest apparel exporter after China. Vietnam remains the fastest-growing among large apparel-exporting nations, maintaining its growth in the US despite the latter backing out of a proposed trade agreement.