Tirupur’s exports are equally divided between the US and European markets. Unfortunately, however, many of the European companies continue to do their invoicing in dollars. While the US dollar lost 11 per cent value against the rupee in 2007, the euro and pound sterling lost only about 1.45 per cent and 6.9 per cent respectively but with no benefit to the exporters. ‘‘In fact, more European companies now want to do their invoicing in US dollars,” said Sakthivel.

But wouldn’t a decline in dollar also make imports cheaper? Also, isn’t it the right time, therefore, to modernise plants and increase capacity because getting machinery from outside is cheaper than ever before? Sandeep Jain replied, ‘‘Theoretically, these arguments are correct. But you need to get down to brasstacks to know the real situation. Who is interested in getting new machinery when capacity expansion itself is unviable? Why do we need to produce more when our existing goods are struggling to find markets?”

And if export margins have come down, import costs in certain sectors have escalated. Wool from Australia, for example. As Sandeep Jain pointed out, ‘‘The Australian dollar has appreciated. In the past year or so, it has gone up from Rs 32 to Rs 35. So here too our costs have gone up.”

With the dollar drop and the consequent escalation in production costs, the fear has been of losing clients to competitors like Bangladesh, the world’s largest exporter, and others like Indonesia and Turkey. ‘‘The biggest fight for exporters is to retain their clients. If they are not able to keep to time schedules and commitments, the buyers could well turn to our competitors and we will never get them back,” warns D.K. Nair, secretary general of the Delhi-based Confederation of Indian Textile Industry (CITI).

... contd.