A strong US dollar has impacted the South Asian textile industry, by and large, hitting the competitive edge of some of the frontrunners while forcing others to export inflation.
A deep fall in the value of currencies of the countries like Sri Lanka, Turkey, Pakistan, and Bangladesh has made their exports more viable than India, which has reported a fall of 31.88% in textile and 18.06% in apparel exports in September 2022.
Ignacio de la Torre, the chief economist at Arcano Economic Research, notes that a strong US dollar has other impacts. “An expensive dollar is generally bad for emerging economies that hold dollar-denominated sovereign debt, but it also makes exports to the US cheaper.” Currency devaluations have traditionally led to greater competitiveness since they make a country’s exports of products and services cheaper than the competition.
According to an analysis by the Confederation of Indian Textile Industry, India’s textile exports have registered a fall of 31.
88% to $1,464.59 million in September 2022. While apparel exports declined by 18.06% to $1,066.18 million in the same period. Cumulative exports of textiles and apparel decreased by 26.67% to $2,530.77 million in September 2022.
An analysis shows that the Indian rupee fell by 10.7% to 84.43 per USD since January 2022 when the exchange rate was noted at 74.
43. But the Sri Lankan rupee declined by 80% in the same period. The currencies of Turkey, Pakistan, and Bangladesh declined by 40, 24, and 18% respectively. Only Vietnam’s currency depreciated lesser than INR. Vietnamese dong fell by 7.26% since January 2022.
