Rupee weakening against the dollar to benefit the textile and clothing category

Apparel exports, which were almost stagnant for the last couple of years, is expected to do better. It will give the garment producers cushion against increasing raw material prices. A. Sakthivel, vice chairman of the Council said that, “However, buyers will ask for cut in rates even for existing orders, and we might not get the full benefit.”

According to Chandrima Chatterjee, adviser at Apparel Export Promotion Council, the rupee has been weakening this year compared with the last fiscal and garment exporters will benefit from it. “Right now, it (weakening rupee) is positive. But, too much volatility will affect exports.” The Centre is expected to reimburse embedded taxes and raise Reimbursement of State Levies, thus giving garment exports a push.

Sanjay K. Jain, chairman of Confederation of Indian Textile Industry, said yarn exports to China increased 20% to 24 % between April and June. However, the Chinese yuan also weakened in the period and hence Indian exports were affected. He added that, “It is more important to see the rupee weakening in context to our competitors’ currency.” From April to June, the weakening Indian currency gave exporters a competitive edge.

The rupee weakening against the dollar is expected to be positive for the textile and clothing sector.