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India's Apparel exports during October dropped 17% to $603 million, compared to the year-ago period, as the country lost market share to China, Vietnam and Bangladesh due to uncompetitive pricing of fabrics in the domestic market, say media reports.
Exporters said the fall in exports was attributed to high cost of yarn on account of rise in cotton prices, making domestic garments costlier. Moreover, overseas buyers are unable to absorb this increase and are placing orders with China, Vietnam, Indonesia and Cambodia who are selling garments at lower rates compared to India.
The duty drawback rates given to Chinese apparel exporters were revised five times in the past few months to 17% from 11% on value of Freight on Board, while the Indian exporters get only 8.8% rebate. Duty drawback is offered to offset the incidence of customs duty, central excise duty and service tax on items for export.
Chairman, Apparel Exports Promotion Council Rakesh Vaid said: "Although demand from the US and EU are reviving, we are losing our share to units in neighbouring nations, as they have large scale production and also enjoy more incentives than us."
Exports share of Indian apparel in the US declined by 6.46% to $2.27 billion during January to September 2009, compared to $3.07 billion in the same period in 2008, while that of China's rose 1.95% to $17.23 billion and Bangladesh by 2.35% to $2.66 billion, the AEPC said.
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