The Hindu : Tamil Nadu News : Exporters feel quota pulse

Online edition of India's National Newspaper
Friday, Dec 31, 2004

Tamil Nadu

Tamil Nadu - Others

Exporters feel quota pulse

By M. Gunasekaran

TIRUPUR, DEC. 30. With only 24 hours left for the end of quota-free regime, the knitwear industry in Tirupur is flooding with enquiries.

The exporters are busy sending samples and responding to the enquiries. Since the situation is fluid, many feel that it would take a couple of months to get a clear picture.

The exporters are preparing themselves for the past three years to meet the challenge and now they are full of hope.

"There are lot of enquiries for all kinds of knitted garments and it is encouraging. What we have expected is correct in terms of customers, bulk orders and enquiries. But we did not expect this much price reduction. Foreign buyers are demanding a minimum of 10 per cent reduction. We expected that to be around 3 to 4 per cent," A. Sakthivel, the president of the Tirupur Exporters Association and Chairman of the Apparel Export Promotion Council, said.

"We have to cut cost and increase production to compete. We are looking forward to the Governments for reduction of transport and infrastructure costs," he added.

Bulk orders

According to R. Sivaram of Classic Polo, business is looking up and many bulk orders are coming to Tirupur. Compared to last year, there has been an increase of 15-20 per cent in terms of order volume.

Many buyers were shifting their business to India, from Pakistan and Bangladesh, he added. "The only worrying factor is the rates that are constantly coming down. Since expecting more rates is not practical, we have to survive with the available rates. For that we must adopt innovative methods to cut cost and wastage," said Mr. Sivaram.

"The reduction in price will have its impact on the small units than the big firms as the latter have comprehensive units including spinning, dyeing and fabrication," said K. Muthusamy of Senthil knitwear, a small exporter. "While China is flooded with orders, we have been struggling with prices," observed J. Senthil, a buying agent.

"There are plenty of enquiries, but most of them have not confirmed because of the price factor. Compared to China, our rates are 10-15 per cent high. Buyers are demanding extremely cheap rates. Chinese are conforming orders faster than us. We have to wait and see as everything cannot be put in one basket," he said.

The increase in the number of enquiries itself was a good sign for Tirupur, K. Muthurathinam of Astraa Exports, said.

It would be good enough if at least 50 per cent of the enquiries got confirmed, he added.

Now, international buyers were quoting price on the basis of the raw material cost in India. So tough price competition was unavoidable, said A. Selvaraj of R.A. Knittings.

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