Garment exporters urged to be cautious with orders from unregistered agents

Tiruppur garment exporters face challenges from unregistered middlemen, urged to be cautious and seek legal consultations for clarity.

Even as the knitwear exporting hub Tiruppur is on a revival path after more than a year of slowdown, garment exporters are facing challenges because of misleading or fake orders from unregistered middlemen.

“We get two complaints or so a week. We are resolving these through negotiations and the cases are coming down. However, exporters need to be cautious,” says K.M. Subramanian, president of Tiruppur Exporters Association.

Industry sources claim that small and medium-scale exporters and several first-time exporters are affected more because of the unregistered middlemen. Some large-scale units have also faced issues. It is estimated that the exporters have lost almost ₹200 crores in the last few years because of this problem. Though such cases are not new, the numbers increased after the pandemic, the sources say.

“These middlemen do not represent any specific brand or buying house. They place orders with the exporters quoting overseas buyers though there is no actual request from these buyers. But, they collect commission from the exporters and fail to take the goods. In some cases, the exporters are asked to do the orders for prices higher than what the buyer has agreed to. The prices are later reduced quoting various reasons. The exporters are cheated in multiple ways,” says one of the exporter.

Exporters have different ways to check details about the buyers and small retailers abroad. They should insist on transparent communication when the unregistered middlemen approach them with orders. They can also use government schemes to ensure the orders are not cancelled by the buyers or the middlemen without a valid reason.

The TEA is also taking legal consultations to help its members and other garment exporters too. It urged the exporters to approach it if the exporters fear lack of clarity in an order.