Overseas textile and apparel importers are re-negotiating their contract terms to get higher realisation from Indian exporters with the rupee’s depreciation. New contract orders are being deferred till Indian currency stabilises. Since China's yuan first depreciated on August 11, the rupee has dipped by over 3.37 per cent to trade at 65.50 against dollar. The Indian currency has depreciated by 5.28 per cent so far this year.

Higher realisation of export driven products from India without raising their prices is the result of a depreciating rupee usually. Therefore, global importers are able to re-negotiate their price of the product for which they had contracted earlier.

Rahul Mehta, President, Clothing Manufacturers Association of India (CMAI) says that this is generally the case and new buyers start re-negotiating contract terms and prices. A new clause is being inducted by overseas buyers normally in the contracts, which keeps re-negotiation of price open. However, he says, old customers have not intervened yet. Mehta added that clients who had negotiated apparel import terms had deferred their orders by two-four weeks, which may even prolong until the rupee stabilises.

Meanwhile, new overseas customers are fixing up apparel price in dollar terms with a condition of the rupee to remain at the current level. Mehta added that if there are sharp currency fluctuations, the price would be re-negotiated. President of Century Textiles and chairman of the Cotton Textiles Export Promotion Council (Texprocil), R K Dalmia, feels that depending upon currency fluctuations in competing country, the Indian textile exporters would benefit accordingly.