Eurozone Crisis Worries India, but Exporters are Full of Hope

As the Eurozone wrestles with a debt crisis, confidence level remains desperately low. And it has had a negative impact on India's economy as well. As Finance Minister Pranab Mukherjee rightly pointed in recent press conference at Manila after taking over as Chairman of the Board of Governors of the Asian Development Bank (ADB), the crisis in the Eurozone had negatively impacted the Indian economy. "The unfolding of the Eurozone crisis has impacted the Indian economy through lower growth, falling business sentiments, declining capital inflows and exchange rate ??and stock market volatility with attendant implication for investor confidence, " he said.

And?the impact is being felt by the textile and apparel exports community, because, though both, the US and Europe are major importers of textile and apparel products from India. Europe accounts for nearly 50 per cent of India's total apparel exports and hence it is no surprise that its debt crisis has adversely hit apparel exports from India. Further, lethargic demand in domestic and export markets, besides heavy debt, weaved a scrambled web for India's textiles industry in 2011-12. While the US is showing a bit of a bounce back in terms of placing orders, orders from Europe are still showing no recovery.

However, the latest export figures are positive. Though India was looking to achieve an export target of $38 billion (about Rs 200,000 crores) this fiscal, 12 per cent higher than previous year, it has been able to close the fiscal at $13.5 billion (Rs 70,000 crore) compared to $11 billion (over Rs 55,000 crore) in 2010-11. Despite a slowdown in the western markets, exporters' strategy of exploring newer destinations like South Africa and Latin America has worked well in their favour.

Commenting on the achievement, A Sakthivel, Chairman of Apparel Export Promotion Council (AEPC) said, "Rupee depreciation has bailed out Indian apparel exporters who were unsure of growth following weak consumer sentiment. The final figures are not yet in, but India expects to close the fiscal at $13.5 billion against $11 billion in 2010-11. "

Moreover, Indian exporters have also entered new destinations such as Latin America, southern and western Africa, Japan, Russia, Israel and Australia during the year. Also, Government's support through Focus Market Scheme and Market Linked Focus Product schemes and various FTAs have given apparel exporters market access especially in Japan. Newer markets brought in 10 per cent business for the industry. According to AEPC data, Japanese demand seemed to help Indian garment exporters. Exports to Japan rose to 4.4 per cent last year after a 2.1 per cent drop the previous year. The industry is also strongly working on moving from cotton to synthetic fibre, as it will help diversify into new products like sportswear, swim suits. This is expected to help double exports in the next five years.

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