New Delhi: “Big stores in the US and Europe are canceling purchase orders from the Indian garment exporters, who are also facing the problem of payment defaults from international buyers,” Textile Minister Shankersinh Vaghela has said.
“Even their (US and Europe) big stores are canceling the orders,” he said adding that the Indian textile exporters send 70% of their shipments to American and European stores.
Though exporters stand to benefit from a sharp rupee depreciation but they are facing payment defaults from their buyers, besides global recession has also taken a toll on their purchase orders.
“They open the letters of credit and then they (banks) cancel it,” the minister said.
Apparel Export Promotion Council Chairman Rakesh Vaid said: “Indian garment exporters are expecting 10% decline due to the global recession this year.”
When asked whether the government was aware of job losses in the export-oriented industries, Vaghela said “When they (exporters) do not have orders, what could they do”.
He said that there was not much the government can do about the issue. “This is an issue of private firms, government cannot do much about it,” he said.
During 2007-08, the country’s textile exports stood at $22 billion, which fell short of the target of $25 billion.
The situation has worsened in the current fiscal. Cotton yarn exports have dropped by 19% and man-made yarn has seen a drop of 17% in September.
After agriculture, the textile industry employs the largest number of people. The clusters like Panipat in Haryana and Tirupur in Tamil Nadu, are also affected by the recession in the global markets.