As hundreds of the US and European garment stores have put the shutters down and several of them have gone bankrupt, many Indian exporters are forced to scale down their businesses by laying off workers.

"Many Indian exporters have closed their garment manufacturing units. A leading exporter in Mumbai has temporarily shut down two factories and laid off 2,000 workers," Apparel Export Promotion Council secretary general Vimal Kirti Singh said in a letter to the commerce ministry.

Textile, including apparel, is the second largest employment generator sector in India after agriculture.

Among the US stores with branches in Europe, Steeve and Barry's along with Mervyns have gone bankrupt, AEPC said.

It said Pacific Sunwear has closed 150 stores while Lane Bryant, Fashion Bug and Catherines are shutting a total of 150 outlets. Besides, Foot Locker is winding up 140 stores and Ann Taylor is closing 117 outlets.

Those scaling down their operations include some of the big names in the garments retailing. These include Eddie Bauer, Cache, Talbots, J Jill, Gap Inc, Foot Locker, Goodbye Levitz, Home Depot, Macy's, Pep Boys, J C Penney, Lowe and Office Depot, AEPC added.

Exports of readymade garments from India tumbled 6.59 per cent in September over the same period last year as a direct consequence of the global economic slowdown, Singh said, adding "The market sentiment is very weak."

AEPC secretary general said there is a drop of 20 to 25 per cent in the business of winter apparels from India. Many buyers have filed for bankruptcy due to low demand and economic crisis.

"There is a gradual deterioration in the growth of readymade garments sector," Singh said.

The commerce ministry is in the process of assessing the impact of the recession in the US on Indian exports.

However, the export scenario was different in the starting of the current fiscal. In April, apparel exports registered a growth of 26.82 per cent to $878.32 million compared with the same period last year.

Exports started dropping from August but saw a bigger impact in September when the decline by 6.59 per cent to $651 million.

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