India’s apparel exports in the current financial year are expected to be down by $ one billion following the appreciation of the rupee.

 “Our (India’s apparel exports) growth was 10-15 per cent. Last year, our exports were worth $ 9.4 billion. This year, we may not catch up with last year’s figure. We may only hit $8.5 billion,” Gokaldas Exports’ Executive Director (Finance) Rajendra J Hinduja told reporters on Tuesday. Another official said the shipments were likely to be in the region of $8.2-8.3 billion for 2007-08.

The apparel export industry is looking at a combination of government sops, enhanced productivity and improved priceline from importers to tide over the “turbulent times” triggerd by the strengthening of the Indian currency. Hinduja said the government had indicated that there will be “some increase in drawbacks after budget.” He expressed the personal view that the Rupee may take a downward trend from March. According to him, the industry is confident of overcoming the situation. He said the importers don’t want to lose out on India, despite prices being expensive compared to far-Eastern suppliers.

The industry was also hit by service tax on rentals, Hinduja said. “Eighty per cent of the industry is rental based. To pay 12.4 pc service tax every month has been a big killer,” he added.