AEPC called for pragmatic approach to arrest rise of rupee

The Apparel Export Promotion Council (AEPC) an apparel exporters’ body called for a carefully considered strategy and a pragmatic approach to arrest the rise of the rupee. As India’s garment shipments are hardly picking up owing to a strong rupee and depreciation of currencies of its competitors like China, Bangladesh and Vietnam despite government’s intentions and support to the industry.

The apparel industry was very hopeful after the special package offered to it in June 2016, where significant financial and investment incentives were offered, besides critical labour flexibilities, with the aim to generate 100.3 lakh additional jobs and USD 30.04 billion additional exports, AEPC said.

The growing cotton prices and rupee appreciation is not only going to nullify the intended impact of the package, but also weaken India’s position against their competitors, if left unchecked, cautioned AEPC Chairman Ashok Rajani.

Chinese Yuan depreciated by 13 percent, Bangladesh Taka by 6 percent and Vietnam Dong by 7 percent whereas India’s rupee hardened by almost 6 percent over the last 3-5 months. Moreover, China got the highest foreign direct investment during this period.

The government is urged to fast track the roll out of the special package with full reimbursements of the reimbursement of state levies (ROSL) claims and implementation of the optional PF provision provided in the package, said Rajani.

Cotton prices have increased by 24.7 percent on an average, across all categories in the last one year. In fact some categories have seen hike of up to 35 percent, he added.

India’s readymade garment (RMG) exports were to the tune of USD 1.60 billion in February 2017 with the growth of 5.05 percent against the corresponding month of February 2016 which was USD 1.52 billion. In rupee terms, the exports stood at Rs 10,764.56 crore in February as against Rs 10,424.28 crore in the corresponding month of 2016.

The country’s RMG exports during April-February were to the tune of USD 15.544 billion, increasing by 0.57 percent compared to the same period of previous financial year. The government has set a target of USD 30 billion for garment exports by March 2019.