Apparel exporters worried about falling global orders
H&M has suspended operations in Russia, while Spain’s second-largest fashion retailer Mango has also temporarily closed its 120 stores in Russia.
“The garments were shipped to Russia via Spain,” said Lalit Thukral, president of Noida Apparel Export Cluster. After all global brands suspended operations, new orders fell by 15%, he added. “We are a bit worried about blocked payments due to the Russian-Ukrainian war,” Thukral said. The garment export cluster in Noida houses 3,000 units, with an annual turnover of almost ₹30,000 crore.
“The Russian-Ukrainian war and the uncertainty surrounding it came at a time when garment exporters were gradually recovering from the trade impact of Covid-19,” said Raja Shanmugam, president of the Exporters Association. of Tirupur. New orders from brands like Zara, Mango, H&M have fallen 25% since the invasion, he said. “Freight rates have started to climb further due to geopolitical tensions and exporters are bleeding,” Shanmugam said.
Black Sea shipments have also come to a screeching halt, and exporters are now sending clothes by air. Air freight rate increased from ₹150 per kg to ₹500 per kg. “Buyers won’t pay for higher freight rates,” Thukral said. Tirupur is home to 2,000 knitwear export units and another 18,000 ancillary units that supply knitwear companies.
“We have no concerns for the fourth quarter of FY22. All orders have been locked in and everything is in place. We are concerned for the first quarter of FY23. We don’t know how long the war will continue and how the world will react to it,” Shanmugam said.
Tirupur is the largest garment manufacturing center in the country and its share in India’s knitwear exports is over 55%.
In the current financial year, Tirupur exporters expect to earn exports worth ₹33,000 crore. They targeted ₹40,000 crore in exports in FY23.