New Delhi: Revenue growth in India's ready-made garments industry is likely to slow to 4-6 per cent this fiscal year from previous year's 6 per cent due to sluggish domestic demand. According to a CRISIL ratings research report, a movement in consumer spending toward other routes such as travel, electronic gadgets, and other services is anticipated to have an influence on demand for ready-made clothing.
An analysis of more than 140 RMG makers rated by CRISIL Ratings, with an aggregate revenue of around Rs 43,000 crore, revealed that export revenue is expected to rise 5-7 percent this fiscal year as retailers in the US and EU replenish inventories, though realisations may remain flat due to lower cotton prices.
RMG Exports Set to Rebound Amid Domestic Growth Moderation
Exports account for one-fourth of the RMG industry's revenue. Last fiscal year, overall revenue growth was led by a 10 percent increase in domestic sales, while export revenue fell 7 percent. CRISIL predicts that this fiscal year would see exports rebound and domestic garment demand growth moderate.
Gautam Shahi, Director, CRISIL Ratings, stated, "The contagion effect of retailers' overstocking last fiscal hampered RMG manufacturers' revenue growth in the first half of this fiscal. The second half, however, is likely to benefit from the festive season and an increase in the number of weddings."
Impact Due To Bangladesh's Political Turmoil
Notably, the ongoing political turbulence in Bangladesh may have a short-term favorable influence on Indian RMG exports. However, the upside is expected to be limited due to the importance of RMG exports to Bangladesh's economy, variations in the product portfolios of RMG exporters in Bangladesh and India, and the preferential import tariff applicable to Bangladesh's RMG exports to the European Union, according to the paper.
ALSO READ: SBI लाइफनि नैथि थाखोनि आरजिनाय: गासै मुलाम्फाया 39 जौखोन्दो बांदों, स्टक गेन
FIRST Business Portal addressing the potential of business capability of North East Region.
