In the race to keep the Europeans warm, Indian sweaters are losing out to their Bangladeshi and Pakistani counterparts owing to their low pricing.
According to data sourced from the European Union Commission, prices of Indian pullovers got expensive by 7.69 per cent per unit in the January-September 2005 period, from Rs 213-Rs 230 per unit.
At the same time, prices of Bangladesh-made pullovers dropped by 2.5 per cent and that of Pakistan's decreased by 5 per cent.
The effect is obvious on the volumes traded in the period. While Indian export volumes dropped by almost 16 per cent, Bangladesh and Pakistan fared better with a decrease of only 8 and 14 per cent, respectively.
The only saving grace remained in terms of value. Though the export value of all the three countries dropped, India's performance was a shade better at 9.17 per cent. Export value of sweaters from Bangladesh and Pakistan dropped by 10.59 per cent and 9.72 per cent, respectively.
"Bangladesh is traditionally stronger in this segment and due to its larger capacities, can afford to decrease its prices. Indian exports are high-end, limiting the scope to reduce prices," said an industry analyst.
Nevertheless, the three countries are not the only losers. Only four countries have shown a growth in their pullover exports to EU. The biggest gainer was China.
World trade in the segment, at about $4.9 billion, increased by almost 17 per cent in volumes and 8 per cent in value. Minus China though, the overall trade showed a decline. China's pullover exports grew by a mammoth 331 per cent in value and 532 per cent in volumes.
"India always had a better margin advantage in any of the segments owing to better designs. So the niche products have higher margins, while China produces and dumps in huge quantities," said Kapil Bagaria, analyst at Sushil Finance.
India's share in the global pullover trade also showed a decline in the period - from 3.41 per cent to 2.86 per cent in value; and from 4.89 per cent to 3.53 per cent in volumes.