Cotton prices have cooled down a bit but apparel makers have got a minimal respite from the dip in raw material costs. Customers of apparel firms, especially from traditional big markets such as the US and Europe, have been asking for discounts, too. Then there is the impact of a weakening rupee.

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But despite these headwinds, Narendra Goenka, chairman of Apparel Export Promotion Council (AEPC) told CNBC-TV18, that if the apparel industry plays the right cards, there is a big vacuum to be filled, considering some of India's apparel exporting neighbours are in trouble.

“There are some headwinds in terms of the real recession in our traditional markets, namely the US and Europe. We have little relief from the cotton and raw material prices, yarn prices, but that relief is minuscule,” Goenka said.

He said that while on one side, the industry got a little benefit from cotton prices and the dollar, on the other they are having to witness the slowing consumption of customers feeling the pinch of the likely recession.

"Customers want a 10-15 percent reduction in finished product prices. But we can lower prices by 8-10 percent only," he said.

As per Goenka, apparel makers would like to compensate for the reduction in demand through the newer markets.

"Consumers are spending money on energy and essentials. There is a little lesser demand for discretionary buying like apparel. So, this is a challenge but we are looking for a little newer markets in Latin America, Australia, Japan, and UAE," Goenka said.

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While apparel firms look for newer markers, what would really work, according to Goenka, is filling the vacuum left by countries such as Sri Lanka, Pakistan, and Myanmar.

“Volume could be a little lower, but we have an opportunity in terms of the challenges in our neighbouring countries. Pakistan is going through a tough time for energy. In Sri Lanka, everybody knows what is the situation. Myanmar has labour issues going on. We have to capture the market so that we are able to achieve our targets," he said.

Goenka expects Sri Lanka’s export to go down by 15-20 percent.

“Sri Lanka’s export is expected to go down by 15-20 percent. We would be able to capture 25 percent of the reduction they face there. So, we will be able to increase our volume by another 3-4 percent. Pakistan, we have a little competition with apparel, but we have a bigger competition in other textile products from Pakistan,” he said.

Goenka also said that he hopes every customer of ours is trying to reduce their exposure in China. He hopes these customers to look at India for apparel. "So, we have to keep our house in order by maintaining the raw material prices,” he said.

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