Global apparel brands are negotiating hard with Indian exporters as cotton prices have fallen 15 per cent and the rupee has depreciated against the dollar. They want Indian apparel exporters to supply garments at the pre-covid level prices.

The impending recessionary pressure in the US and Europe is forcing global brands to negotiate hard with Indian exporters, who have now started looking at other countries like Japan, Australia and Latin America for developing new markets for Indian apparels.

Since the rupee has depreciated against dollar, foreign buyers are driving hard bargains to lower the prices of garments. However Indian exporters can’t give huge discounts despite the rupee weakening because cotton prices have not come down to the 2019 level. As per Narendra Goenka, Chairman, Apparel Export Promotion Council (AEPC), cotton prices have dropped by 15 per cent from the high of Rs 1 lakh per candy (356 kg). It will fall further in the coming weeks.

Raja M Shanmugham, president, Tirupur Exporters Association (TEA) says, global buyers now want garments at the pre-covid prices. For instance, the price of a product that was sold at $7 this year due to high cotton prices, they are now asking for $5, the price at which it was sold in pre-covid times. At best, they can offer a price which is 15 per cent lower than what they are offering now.

The recessionary trend in the US and Europe will impact orders for spring 2023 that are manufactured and shipped between October to March. Exporters are expecting a decline of export orders up to ten per cent for spring 2023, which will impact the second half of the current financial year. This means that the projected garment exports for FY 23 will be missed. Exporters are now looking at newer markets like Japan, Latin America and Australia to make up for the expected losses.