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Buoyed by last year's growth and China off-loading its export orders, the Apparel Export Promotion Council (AEPC) is targeting a robust 13-15 per cent growth rate for the second consecutive year.
While apparel exports from India have been able to maintain the growth rate till the month of July, the industry expects a further jump in the growth rate post the announcement of the India-EU Free Trade Agreement (FTA) which is expected to be announced in mid-September. If and when passed, the FTA will place Indian garment exporters to par with their Bangladeshi counterparts who export apparel duty free to European nations.
Last year, Indian apparel exports were able to post a healthy growth rate of 15.5 per cent at $14.9 billion in 2013-14 as against $12.9 billion in 2012-13, thanks to revived demands from the US and European markets. At 13-15 per cent, Indian apparel exports are expected to touch $16-17 billion for the year 2014-15.
Not only are the two major economies - the US and the European Union - are witnessing a resurgence in apparel export orders to India but also Indian apparel exporters vying for further penetration in the relatively newer markets of Middle East, Latin America and Africa.
Add to that, India is expected to gain from its two rival apparel exporting nations - China and Bangladesh, who are expected to witness an off-loading of export orders.
"Though there are no estimates of how much of the off-loading will benefit India but we are certain the same will help us maintain a robust growth rate of 13-15 per cent. Industry estimates indicate that till July we have been able to maintain the 15 per cent growth rate. Moving forward, the FTA announcement should further boost garment exports," said a senior official at the Apparel Export Promotion Council (AEPC) on condition of anonymity.
On one hand, while China - which, at 36 per cent global share is the largest apparel exporter - is being forced to off-load export orders due to high manufacturing costs and labour shortage, Bangladesh is also facing safety and compliance issues.
"China's growth rate is slowing down due to high manufacturing costs and labour shortage. Hence, it is being forced to off-load orders which will benefit other apparel exporting nations like India and Vietnam, among others. Moreover, India's other competing nation Bangladesh is facing safety and compliance issues. These should help India maintain last year's growth rate," said D K Nair, secretary general of Confederation of Indian Textile Industry (CITI).
Meanwhile, independently as well, industry players state that the domestic garment industry is also doing well due to steady demand and increased capacities.
