Garment exports slumped by 26 per cent in September. The country’s exporters are facing stiff competition from countries such as Bangladesh, Sri Lanka, Vietnam, Cambodia and Ethiopia. Many of these have a duty advantage in major European markets compared to Indian manufacturers because India does not have a free trade agreement with the European Union. Indian products, therefore, get outpriced and lose out on the market.
Overall, India’s readymade garment exports in April-September 2018 fell 10.66 per cent as compared to the corresponding period of the previous year. Exports from Bangladesh have grown by 15 per cent. Compared to India, products manufactured in Bangladesh are ten per cent cheaper. Also, Bangladesh has a free trade agreement with the EU. But there is a duty of ten per cent on readymade garments manufactured in India.
Apparel exporters, particularly from Punjab, Haryana and Uttar Pradesh, face high input costs like labor, transportation and processing. In fact manufacturers based in the northern states are not even able to compete with the Tirupur cluster in Tamil Nadu because of costs. Textile clusters in the three northern states employ over two million workers. Around 200 textile exporters are based out of Punjab and Haryana alone.