Global Economy

High inflation in US, Europe robs Tiruppur exporters of festive cheer

Christmas and New Year demand from US and European buyers amid persistently high inflation in those markets has failed to bring cheer to the country’s apparel trade.

Exporters from Tiruppur, the Tamil Nadu town that accounts for 55% of the country’s apparel exports, said global brands have bought low-priced garments like simple t-shirts that cost around $2 per piece, in contrast to fashion garments and jackets priced $8-10 per item that they bought last year during the holiday season.

Traditionally, shoppers in the US and Europe prefer to buy high-priced items during the Christmas and New Year period. “Surprisingly, our overseas bulk buyers say that this year the shoppers are buying items like innerwear and t-shirts, and are not much inclined to costlier garments,” said Raja Shanmugam, managing director of Tiruppur-based knitwear company Warsaw International. Both the US and Europe are struggling with high inflation, caused by a ramp up in demand after the pandemic and supply chain disruptions due to the Russia-Ukraine war, among other reasons.

“Leading global brands have taken low-priced items this year for the holiday season. After the 2008-09 economic crisis, we are witnessing this trend for the first time,” said Shanmugam, also a former president of Tiruppur Exporters Association.

Added K Balakrishnan, partner of Tiruppur-based knitted garment manufacturing and exporting firm Aahana International: “People are talking about lower demand in the US and Europe. We are a supplier to Australia and there too we are facing a similar trend. The situation is gloomy.” KM Subramanian, president of the Tiruppur Exporters Association said, the Christmas and New Year demand this year is down by 40%. “We were hopeful that demand for the holiday season would pick up from September. But unfortunately, that did not happen. The smaller units, in particular, had been hard hit.”


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