The rupee weakening against the dollar is expected to be a positive for the textile and clothing sector.
Sanjay K Jain, Chairman of Confederation of Indian Textile Industry, stated that yarn exports to China increased from 20 per cent to 24 per cent between April and June. However, the Chinese yuan also weakened in this period and hence Indian exports were affected.
“It is more important to see the rupee weakening in context of our competitors’ currency,” he said. From April to June, the weakening Indian currency gave exporters a competitive edge. According to Chandrima Chatterjee, Adviser at Apparel Export Promotion Council, the rupee has been weakening this year as compared with the last fiscal and garment exporters will benefit from it. “Right now, it [weakening rupee] is positive. But, too much volatility will affect exports.” The Centre is expected to reimburse embedded taxes and raise Reimbursement of State Levies, thus giving garment exports a push.
Apparel exports, which were almost stagnant for the last couple of years, are expected to do better. It will give the garment producers a cushion against increasing raw material prices. “However, buyers will ask for cut in rates even for existing orders, and we might not get the full benefit,” said A Sakthivel, Vice Chairman of the council.
