Apparel exports have declined by 14% in rupee and 8% in dollar terms in January this year compared with the year-earlier month, latest data showed.
Between April and January of last financial year, apparel exports stood at ₹93,745 crore and for the same period this fiscal, it was ₹88,709 crore, a drop of 5%. “We were hoping to remain at $17 billion of total apparel exports this year,” said a spokesperson of Apparel Export Promotion Council (AEPC).
“But, I do not see the sentiments for any major correction. Usually, orders are good between January and March. However, this year, exporters are cutting back on orders because of financial crunch,” said the spokesperson.
If a garment unit with ₹10 crore turnover has ₹1 crore locked up in pending refund arrears, it is a problem for exporters. Almost 80% of the benefit in the apparel package announced by the Centre in 2016 is towards ROSL. Almost 55 % of garment exporters had not received the ROSL (Rebate of State Levies) since last July and this amounted to almost ₹2,000 crore, the AEPC spokesperson added.
Labour-intensive sector
Apparel is a labour-intensive sector and the ongoing issues are weakening it, said Raja Shanmugham, president, Tirupur Exporters’ Association. While the refunds from the Centre are pending, the industry continues to make the mandatory payments every month. This is crippling the industry, he said. “The international market is not bad. There is an internal competitiveness problem,” added Sanjay K. Jain, chairman, Confederation of Indian Textile Industry, on the reason for drop in exports of not only garments but also other textile products.
While the country’s exports are growing, decline in apparel and textile exports will bring down the share of the sector in the export basket. “The annual textile and clothing exports this year compared to last year will be a close call. It might be the same as last year. However, yarn and garments are going to be lower,” Mr. Jain added.
