By : Durba Ghosh

The country's leading garment exporters are basking under asurfeit of orders from Europe and the US, but relentless pressure on marginsmeans they can't relax yet despite a sharp uptick in demand in these keymarkets.

"The demand is finally stabilising," said ArvindMills CFO Jayesh Shah.

Companies such as Arvind, Alok Industries, Gokaldas Exports,Orient Craft and House of Pearls say their order books are chockfull tillSeptember despite the prospect of more economic pain in the US and Europe.

The growth in volumes has gathered pace sharply in recentmonths as customers in overseas markets who slashed budgets to the bone areagain returning in hordes.

But exporters can't celebrate yet because of a lingeringpressure on pricing, mainly a result of the rupee's appreciation and intensecompetition from suppliers of neighbouring countries like Bangladesh. With rivals selling garments up to 25% cheaper, Indian garment exporters are beingpushed to lower prices.

The volumes are increasing,but the margins are not great,said Apparel Export Promotion Council senior vice-chairman Praveen Nair.Thevalue of Indias apparel exports dropped 10 % to $ 9.7 billion for the year toend March from a year ago due to lower prices, he said.

Orient Craft managing director Sudheer Dhingra said there isa squeeze on the pricing front while Alok Industries MD Dilip Jiwrajka saidfresh orders will be fixed at new rates, which will pinch margins due tocurrency swings. Even so, the swell of orders comes as a relief to exporterspushed into a corner by recession.

For example, Arvind Mills expects a 15% growth in orders inthe three months to end June from the March quarter.

Likewise, Bangalore-based Alok Industries expects a 50 %increase in orders for the three months to end June while Gokaldas Exports isseeing ticking volumes.

"We will do the same kind of business we did last AlokIndustries MD Dilip Jiwrajka said fresh orders quarter, which is good news,"says Gokaldas Exports managing director Rajendra Hinduja

Even so, the swell of orders Even the marginal depreciationin the rupee's comes as a relief to exporters pushed into a corner valueagainst the dollar in recent weeks will be short-lived, say exporters.

Originallypublished in The Economic Times: 25 May 2010