It’s a perfect Christmas gift that garment exporters from the knitwear capital Tirupur were looking for, as exports for the October-December quarter may be among the best quarters ever, with a 15% increase in exports.
“We expect exports to grow at least 15% (by volume) and 10% by value for this quarter,” said Raja Shanmugham, head of Tirupur Exporters Association. The demand pull has been so strong that exports for the current fiscal may top last years’ Rs 25,000 crore even though more than two months were lost due to lockdown and production impairment due to labour shortage.
A combination of factors: Pent up demand, anti-China action from buyers,, favourable Euro and inherent business resilience will all make Christmas 2020 a cheerful one.
October exports were up 8%, November was up 1% and December is showing a strong trend. “Exports are back, with a bang.
The growth that we are seeing is here to stay,” said Apparel Export Promotion Council’s head A Sakthivel.
Shanmugam however is keeping his fingers crossed. “There are some issues which I am not comfortable with. While most migrant workers are back, restart of long-distance train services bring back more. Besides, some European countries are witnessing a second wave of Covid and have announced partial lockdowns which could impact Christmas buying,” he said.
Not just exports. Stocking up by domestic brands has been high, driving business. “Domestic demand is matching exports. We expect domestic supplies to overtake exports, if the present demand continues,: Shanmugam added. Tirupur usually exports 60% of its merchandise and the rest is despatched to the domestic markets.
Sakthivel however is bullish. “Most of the Christmas buying happens online. Shipments for Christmas are over and it has been very good,” he said.
American embargo on exports of cotton from China and knitwear made using Chinese cotton is helping Indian exporters. “Several brands are now avoiding China and coming to Tirupur,” he said.
The INR/Euro which was at 78.97 last year is now 89.47. This is a leg up considering European Union is the largest importer of Tirupur garments. Garment exports from Tirupur dropped to Rs 25,000 crore for the year ended March 2020, from Rs 26,000 crore in the previous year as Covid pandemic wiped away most of March exports. The target was to export garments worth Rs 28,000 crore. Domestic sales were flat at Rs 25000 crore for the fiscal. The town employs 6 lakh workers, half of whom are guest workers from other states.