The weaker Indian rupee is making Indian fabrics more attractive to Sri Lanka’s export-garment sector.
The Joint Apparel Association Forum (JAAF) says that local garment factories should consider using Indian fabrics to manufacture garments for export, to benefit from the Indian rupee depreciation.
“The Indian rupee has depreciated by nearly 20%, but the Sri Lankan rupee is still very strong. So this will attract interest from Sri Lankan importers as there is a possibility of using this difference in exchange rates to benefit both,” said JAAF head, Ajth Dias, speaking at the opening of the AISEX and FASE apparel industry exhibitions last week.
The local garment export industry imports around US$ 1 billion worth of fabrics annually. But although, India is one of the largest producers of cotton and synthetic fabrics in the world, due to quality differences, a majority of fabrics are imported from East Asian countries like Hong Kong and not from India. “Sri Lankan garment manufacturers have now moved into the medium to high-end markets. So the fabrics supplied to Sri Lankan apparel exporters need to be of a greater standard than what is generally supplied to Indian apparel exporters. But there is the possibility of companies in Sri Lanka and in India cooperating for mutual benefits,” said Mr Dias.
The JAAF estimates that input raw materials, such as fabrics, account for up to 60% of manufacturing costs of garments in Sri Lanka. A shift to Indian fabrics, where possible, is expected to help local garment factories remain competitive in the face of increasing manufacturing costs in Sri Lanka.
This years AISEX and FASE apparel industry exhibitions, organised by the Sri Lanka Apparel Institute and Lanka Exhibitions and Conference Services, showcased many synthetic and rayon fabric suppliers from India.
The Export Development Board worked in collaboration with India’s Synthetic and Rayon Textile Export Promotion Council to showcase India’s synthetic fabrics to local garment manufacturers.
Manufacturers of fabrics and accessories from the region and also machinery suppliers, showed their products on November 6 and 7 at the BMICH.