Exchange Rate Volatility and Trade Dynamics of Global Fashion Brands: Empirical Evidence from H&M and Zara in India

Abstract

The global fashion industry is incredibly sensitive to changes in currency values, which can really shake up import and export activities in emerging markets like India. This study examines the influence of exchange rate volatility on the trade performance of global fashion brands H&M and Zara in the Indian market. Using data from 2015 to 2024, it applies empirical techniques including correlation analysis, cointegration tests, and regression models. Findings reveal that the depreciation of the Indian Rupee against the US Dollar and Euro had a significant effect on the trade volumes of both brands, particularly affecting imports more than exports. Furthermore, the study sheds light on how India's GDP, global economic trends, and fashion trade are interconnected. The results suggest a strong interdependence between import and export flows, emphasizing the need for strategic currency risk management and adaptive supply chain operations.