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Published
May 8, 2013
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Exchange rate punishes India’s export growth

Published
May 8, 2013

India exported about 703 billion rupees of clothing for the fiscal year ended in March 2013. The results represented an increase of 7% but a 6% drop when converted to dollars ($12.923 billion). And the country is facing increasing competition from Turkey on exports to Europe.

Indian apparel exports to Europe were down 21% compared to the previous year, totaling approximately $5.129 billion of goods sold to that market. “In January and February, suppliers such as Bangladesh and Turkey recorded increases in exports to Europe, and China and India recorded a decline,” said Arumugam Sakthivel, Director of AEPC (Apparel Export Promotion Council), noting that the trend continued into March.

America is partly helping to offset the phenomenon. Over the past two years, Indian apparel exports to the United States grew 4.7% to $13.2 billion, despite a major setback in January and February 2013, with only $571 million of goods shipped or a 7.2% drop.

To support companies straggling with rising commodity prices, AEPC has again called for a ban on exports of Indian cotton. Two years ago, such a move helped spur a global price spike. The agency has also demanded that Indian manufacturers be able to import their materials exempt from all customs duties. For Arumugam Sakthivel, this is the only answer to the decline in exports observed since July 2012.

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