Bilateral deal with UK will be better than EU system
BREXIT will be beneficial for Indian manufacturers as a bilateral deal with the UK will be better than the current EU system, according to Sriramulu Balakrishnan, MD of KG Denim. He also says that as India does not enjoy any preferential tariffs relating to the US, any increase in import tariffs by President Donald Trump will not affect Indian exporters.
“US imports of textiles and garments from India are already subject to tariff. India does not enjoy any preferential tariffs relating to the US. Any increase in import tariffs will not affect Indian exporters, and this increase will be applicable to all countries. India exports denim fabrics to many countries in Asia, Africa and South America, which in turn are exporting garments to the US on a favourable nation policy. Only after concrete policies are announced in the US, can we discuss the impact of protectionism,” Balakrishnan told. Talking about the global demand for denim fabrics, he said that they are changing every season with innovative finishes and technical aspect of the product. “Jeans is a fashion product, brands and retailers are moving towards fast fashion. Our customers are moving towards selling fashion at a price, trying to imitate the Zara model. Therefore, there is constant pressure to provide new products on a regular basis,” added Balakrishnan.
When asked about the competition in the textile product segments, he said, “All products in the textiles and apparel segment face competition. Our strategy has been to focus on niche segments so as to insulate our price and margin structure. Our ethical practices regarding labeling in organic and other segments have helped us build trust with our customers.”
The demand for denim in the domestic market has grown at a strong rate of about 7.5 per cent CAGR in the past 6 years (2009-10 to 2015-16). Domestic market demand will continue to grow, with short-term variations due to demonetisation, fashion and domestic economic cycles. Export demand is currently stagnant due to uncertainties in many overseas markets, noted Balakrishnan.