Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Research

| More

Growth of India's apparel exports contingent upon overcoming internal and external headwinds: ICRA

Posted On: 2018-03-05 10:01:04

The pace of growth in India's apparel exports is likely to remain contingent upon the industry's ability to overcome the internal as well as external headwinds that the industry is presently facing. According to a recent ICRA report, while transition to the new taxation and export incentive regime has posed liquidity challenges for the industry, intense competitive pressures in the global market, particularly in light of impending trade agreements and foreign currency movements pose additional challenges. In addition, uncertainty on the apparel exports to the UAE looms, in light of inexplicable trends witnessed in the recent months.

Says Mr. Jayanta Roy, Senior Vice-President and Group Head, ICRA, "The accommodative stance taken by the government by way of upward revision in export incentives in November 2017, has addressed one of the issues that the segment is facing. However, sustainability of growth remains contingent on how the scenario on the other fronts pans out."

As per ICRA, post upward revision in export incentives, India has reported a 6-20% Y-o-Y growth in apparel exports to key nations such as the US, the UK, Germany, France and Spain during the period Nov-Dec 2017. However, despite this, the overall apparel exports are down by 1% Y-o-Y in 10M FY2018. The decline has been primarily driven by the sharp decline in exports to the UAE market. UAE had emerged as one of the prominent apparel export destinations for India, with its share increasing to ~23% in FY2017 from ~12% in FY2014. Particularly for the ten-month period ending June 2017, India's apparel exports to UAE had grown at a sharp pace (56% Y-o-Y). Thereafter, apparel exports to the UAE have fallen at an equally fast pace, by as much as 45% since June 2017. Excluding the trade with the UAE, India's apparel exports are estimated to have stood 3-4% higher in 10M FY2018.

As for the global scenario, apparel trade has remained subdued for the third consecutive year, expanding by just 1% in CY2017 on a low base, following a 2% and 5% decline witnessed in CY2016 and CY2015 respectively. In addition, the world's largest apparel manufacturer and exporter - China, has been able to arrest the sharp declining trend in its apparel exports to a mere 1% in CY2017 as compared to de-growth of 10% and 6% in CY2016 and CY2015 respectively. Accordingly, China is estimated to have vacated just US$ 1 Billion worth of space in global apparel trade compared to US$ 10-15 Billion vacated in each of the previous two years. China's declining market share was earlier expected to offer opportunities to the other major apparel exporting nations, to garner a larger pie of the global apparel trade.

Besides China and India, Bangladesh and Vietnam remain the other key apparel exporting nations. Supported by its duty-free access to the EU market, Bangladesh retains its status as the second-largest apparel exporter after China. Vietnam remains the fastest growing amongst large apparel exporting nations, maintaining its growth in the US market despite the latter backing out of a proposed trade agreement. Impending developments, including the modified Trans Pacific Partnership (excluding US but including other prominent buyers such as Japan and Australia) and the EU-Vietnam Free Trade Agreement, which are likely to take shape in the current calendar year have the potential to further strengthen Vietnam's presence in the global apparel market.

Adds Mr. Roy, "in addition, the competitiveness of the Indian apparel exporters will also remain contingent upon the movement in foreign exchange rates. This remained a key challenge last year, with the Indian rupee appreciating by 3% (vis--vis US$) in CY2017 compared to 1-3% depreciation in currencies of other key apparel exporting nations (i.e China, Bangladesh and Vietnam)."


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Jindal Steel & Power - Initiating Coverage - Angel Broking

Hurrah, Reliance is now a Consumer Company: Angel Broking

Shriram Transport Finance Company Ltd - Initiating Coverage - Angel Broking

Amber Enterprises India Ltd - Initiating Coverage - Angel Broking

Initiating Coverage on Bata India - Better brands for better growth - Angel Broking

IMP Powers' successful foray in renewable energy

Parag Milk Foods 4QFY2018 Result Update - Angel Broking

GMM Pfaudler Limited 4QFY2018 Result Update - Angel Broking

Result Update: Gabriel India Ltd - BUY - TP Rs.193 - Kotak

Result Update: Apollo Tyres - ACCUMULATE - TP Rs.300 - Kotak

Result Update: Havells India Ltd - SELL - TP Rs.500 - Kotak

Result Update: Chennai Petroleum Corporation Ltd - BUY - TP Rs.373 - Kotak

Result Update: Shankara Building Products Ltd - ACCUMULATE - TP Rs.2017 - Kotak

Result Update: Sun TV Network Ltd - ACCUMULATE - TP Rs.964 - Kotak

Result Update: Akzo Nobel India Ltd - BUY - TP Rs.2150 - Kotak

Syndicate Bank Q4 loss widens to Rs. 2195.12 crores

Result Update: Mahindra Holidays & Resorts India Ltd - BUY - TP Rs.390 - Kotak

Result Update: The Phoenix Mills Ltd - ACCUMULATE - TP Rs.676 - Kotak

Result Update: Blue Dart Express Ltd - BUY - TP Rs.4050 - Kotak

Result Update: Zee Entertainment Enterprises Ltd - ACCUMULATE - TP Rs.623 - Kotak

Result Update: Asian Paints Ltd - ACCUMULATE - TP Rs.1320 - Kotak

Result Update: Voltamp Ltd - BUY - TP Rs.1349 - Kotak

Result Update: Kajaria Ceramics Ltd - BUY - TP Rs.648 - Kotak

India's original E-Commerce Poster Boy sells out to Wal-Mart: Angel Broking

Result Update: Carborundum Universal Ltd - BUY - TP Rs.420 - Kotak

Result Update: Indocount Industries Ltd - BUY - TP Rs.103 - Kotak

Result Update: GE Shipping Company - SELL - TP Rs.350 - Kotak

Technology: CTSH results: on balance negative

Result Update: Greaves Cotton Ltd - BUY - TP Rs.153 - Kotak

Result Update: NIIT Technologies Ltd - ACCUMULATE - TP Rs.1083 - Kotak

Result Update: IRB Infrastructure Developers Ltd - ACCUMULATE - TP Rs.292 - Kotak

Result Update: Venky's India Ltd - REDUCE - TP Rs.3750 - Kotak

Result Update: Castrol India Ltd - BUY - TP Rs.213 - Kotak

Result Update: Radico Khaitan - ACCUMULATE - TP Rs.421 - Kotak

Q4 FY18 Result Update: Marico Ltd - ACCUMULATE - TP Rs.334 - Kotak

Q4 FY18 Result Update: Adani Port and SEZ - BUY - TP Rs.485 - Kotak

Q4 FY18 Result Update: Kansai Nerolac Paints Ltd - BUY - TP Rs.600 - Kotak

Q4 FY18 Result Update: Hero MotoCorp - BUY - TP Rs.4553 - Kotak

Q4 FY18 Result Update: Hindustan Zinc - REDUCE - TP Rs.318 - Kotak

Q4 FY18 Result Update: Container Corporation of India - BUY - TP Rs.1550 - Kotak

Q4 Result Update: Jindal Stainless Hisar Ltd - BUY - TP Rs.318 - Kotak

Ultratech Cement - Q4FY18 Result Update - Arihant Capital Markets Ltd

Company Update: Va Tech Wabag Ltd - BUY - TP Rs.672 - Kotak

K P Energy Ltd ties up for development of 300 MW wind power project

Matrimony.com Ltd - Initiating Coverage - Angel Broking

ACC Ltd Q1CY18 Result Update Rating - ACCUMULATE - Arihant Capital Markets

Company Update: Cummins India Ltd - BUY - TP Rs.862 - Kotak

FY18 Result Update: Tata Sponge Iron Ltd - REDUCE - TP Rs.1172 - Kotak

National highways: utilization and monetization - Kotak

Initiating Coverage: Parag Milk Foods Limited - Angel Broking





Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2018