Global clothing firms asking Indian exporters to cut down prices

12 Jul 2022 , 02:00 PM

Global brands are being forced by the looming recession in the US and Europe to engage in tough negotiations with Indian exporters, who have now begun looking at other nations like Japan, Australia, and Latin America for the development of new markets for Indian goods.

"From a high of Rs1 lakh per confection, cotton prices have decreased by 15%. (356 kg). In the following weeks, it will decrease much more "according to Narendra Goenka, the council's chairman for apparel export promotion (AEPC).

Foreign purchasers are making aggressive offers to reduce the cost of clothing as a result of the rupee's depreciation against the dollar. The rupee dropped to a new record low of 79.41 against the US dollar on Monday as a result of the increasing dollar index and economic concerns, with investors continuing to choose the greenback as a safe-haven investment. At the interbank foreign exchange, early morning deals saw the Indian rupee open lower at 79.30 and continue to decline, breaking its previous record low of 79.37 levels.

The AEPC chairman stated that the orders for Spring 2023 that are built and transported between October and March will be impacted by the recessionary trend in the US and Europe.

Goenka stated, "We are expecting a reduction in export orders up to 10% for Spring 2023, which will harm our second financial year."
This implies that the $19 billion in expected garment exports for FY23 would be missing. India exported clothing worth $16 billion in FY22.

The AEPC chairman continued, "We are now looking at newer markets like Japan, Latin America, and Australia to make up the predicted losses."