The weakened rupee has proven a boon for the textile and apparel market in India as the country recently regained its position among the top three exporters to the US.
According to the latest data released by the US Department of Commerce’s Office of Textiles and Apparel (OTEXA), India’s textile and apparel exports to the US totaled $4.76 billion for the first nine months of 2013, a 5.1 percent increase over the same period last year.
Total US textile and apparel imports are up 3.45 percent through September, and China remains the largest supplier to the US with year-to-date dollars up 2.5 percent to $31.3 billion, followed by Vietnam, who saw a double digit increase of 14.1 percent to $6.5 billion. Bangladesh is currently the US’s fifth largest apparel provider with year-to-date exports up 9.5 percent over last year to almost $4 billion.
India fell out of the top five exporters in 2012, but rupee depreciation has improved the country’s competitiveness, especially against China, Bangladesh and Vietnam. Rising labor costs and an appreciating yuan have sent more garment orders to India. Wage protests and factory safety issues in Bangladesh have had a similarly beneficial effect on India’s garment export industry.
India Ratings & Research published commentary this week citing that garment exporters in India should expect rapid growth through 2014.
Tanu Sharma, Associate Director at the research company said, “A combination of improving textile and apparel demand from large markets, benefits accruing from a depreciating rupee and structural changes in competing markets like China and Bangladesh have resulted in the improved performance of and stronger order book visibility for Indian exporters. The trends are seen to sustain in the short-to-medium term.”
Garment exporters are operating at full capacity and even outsourcing some manufacturing to keep up with the influx of orders as total exports in the six months from April through September grew 13 percent compared to the same period last year. The challenge for India, the research company reports, will be to manage liquidity with the increasing volumes and the higher use of working capital limits in order to sustain their standing and realize export revenue growth for 2014.