India’s apparel exports, expected to grow steadily, maintaining a compound annual growth rate of 12.06 per cent to hit $82 bn by 2020-21, are expected to remain flat during this fiscal and the first half of next year due to a decline in overseas demand, primarily in the United Arab Emirates (UAE), says a report by US-based trade finance company Drip Capital. The overall market demand is pessimistic and exports have been declining in the key export markets, the report, titled ‘Commodity Insights Apparel’, said.
UAE markets witnessed a sharp decline in imports, necessitating Indian exporters to shift to new import markets, according to a report. The problem is compounded by rising competition from nations like Cambodia and Bangladesh that enjoy low labour costs that India cannot compete with. Incentives for upgrading technology, market diversification, and innovation are good starting points to help India’s apparel exports regain their upward growth, Drip Capital Co-Founder and Co-Chief Executive Officer Pushkar Mukewar said. As India cannot compete on lowering labour costs, the focus should be on expanding schemes for technology upgrades, he added. Four new markets show high potential for future growth: The United Kingdom, Chile, Israel and Japan, says the report.