With cotton t-shirts and shirts leading the way, apparel exports for the month of June 2011 rose by 42.09 per cent against the corresponding period last year for India. According to the Apparel Exports Promotion Council (AEPC), In rupee terms, the exports have increased by 36.86 percent in June 2011-12 over the same month of previous fiscal.
In the first three months of the financial year 2011-12, apparel exports have reached US$ 3.581 billion (Rs 15,824 crore approx.) at a growth rate of 34.47 per cent against the corresponding period last year. According to AEPC, while 30 per cent of apparel exports go to the US, around 50-60 per cent of apparels are exported to the European countries.
The growth in apparel exports comes at a time when textile exporters have taken a hit amidst rising interest rates. With both pre-shipping and post-shipping rates at an all time high for textile exporters, the industry is bearing additional costs worth over Rs 7000 crore per annum in exports.
What's more, the industry is also reeling under the removal of interest subvention on exports, says the Apparel Export Promotion Council (AEPC). The minimum rate in pre-shipping and post-shipping credit that textile exporters avail is around 7.5 per cent. Till September 2010, the apparel exporters were enjoying a two per cent subvention which had eased availing of working capital. However, not only was the interest subvention removed in September last year but interest rates have also risen gradually.
While the concept of interest subvention of two per cent was removed long back, the recent hike in interest rates have resulted in additional costs of Rs 7000-8000 crore for the industry. Moreover, while the minimum rate on pre-shipping and post-shipping credit is around 7.5 per cent, banks have been hiking interest rates, especially in the last few months.
In the last financial year exports increased by 4.2 per cent from previous FY 2009-10 and totaled Rs 50,000 crore approx. in April-March 2010-11.
