- 24 Jun 2022
- ICICIdirect Research
GLOBAL APPAREL BRANDS PLANNING TO SHIFT APPAREL SOURCING FROM SRI LANKA TO INDIA
News: Global apparel brands are seeking discounts from Indian exporters as they seek to divert orders from Sri Lanka to de-risk supplies from disruptions amid the political and economic crisis in the island nation
Views: Sri Lanka exports apparel worth US$5.42 billion. Currently, its apparel exporters order book is full. Global brands have shown interest in India-made garments but are asking for lower prices as key buyers US and Europe are facing high inflation. Indian garment exporters are considering reducing prices by 5% to bag orders from global brands. If Indian garment exporters get these orders, the profit margin may be lower than they normally make. However, getting orders would enable them to enhance their customer base by acquiring newer customers and service them from a long term perspective. New customers acquired gradually could be provided with value added products, which have better margins that would aid the performance of Indian apparel exporters over the longer term
Impact: Neutral