Now garment exporters are facing this problem, know what pressure the global companies are putting up!?

With the severe slowdown in the US and Europe, global brands have had an opportunity to pressurize Indian exporters on price issues. On the other hand, Indian exporters have also started focusing on finding new export markets in other countries like Japan, Australia and Latin America.

Apparel Export Promotion Council (AEPC) chairman Narendra Goenka said cotton prices have fallen nearly 15 per cent from the all-time high of 1 lakh per candy (a candy of 365 kg), and will further fall in the near future. With cotton prices falling, global brands have started negotiating on the price front and are pushing for selling goods at pre-corona pandemic prices. Also, due to the weakening of the rupee against the dollar, foreign buyers are negotiating to bring down the prices of clothes. The rupee on Tuesday weakened to a new low of 79.60 against the US dollar on gains in the dollar index and economic concerns.

Let us tell you that textile exporters say that total capital expenditure has increased by 65 percent to Rs 3,034 crore from Rs 1,841 crore in the same quarter a year ago. Even though the rupee has depreciated against the dollar, it may not give a big discount to the demand from global companies as cotton prices have not reached 2019 levels. We can offer a maximum discount of 15% off the current sale price. The slowdown in the US and Europe is expected to impact 2023 apparel orders, which are manufactured and exported between October and March. This time export orders are expected to decline by 10 per cent, which will have a direct impact in the second half of the current financial year.

This means that India, which has set its target of $19 billion in apparel exports for FY2023, has exported clothing worth $16 billion so far in FY22.