With the major economies of the United States and the euro zone still showing no let-up from their halting recovery, Indian apparel exporters continue to suffer from tepid demand. They are also of late compelled to make do with unpleasant non-tariff barriers (NTBs) which take many shapes such as rigorous standards.
Apparently, the most galling one is insistence on fair labour standards that includes not importing garments/apparel made by child labour or forced labour or prison labour from exporting countries.
While no one could fault the new perception of concerns for the vulnerable, the unilateral prescription of what constitutes proper labour practices continues to be a bone of contention. However, trading countries have braced themselves to face down any challenges with some of the exporting countries voluntarily taking on themselves the onus of putting in place a code of ethical standards so that their goods do not get jettisoned in the overseas markets on this count.
Though India's merchandise exports overshot the target by a couple of billion dollars to reach $303 billion in 2011-12 fiscal year, the country could not achieve the target of $32.3 billion of textile and clothing exports as it fell short by substantial value. Still, India ranks as the sixth largest exporter of apparel with a global market share of 3.25 per cent, after China at 37 per cent, the EU at 28 per cent, Hong Kong at 7 per cent, Bangladesh at 4.5 per cent and Turkey at 3.6 per cent.
For a country that boasts of the largest producer of King Cotton, the position behind tiny countries such as Bangladesh and Hong Kong has more to do with several domestic disabilities that range from high cost of finance, lack of flexible labour policy to infrastructural impediments. Added to these travails is the emerging concern over and apprehension of India's apparel not making to the traditional global markets if the orchestrated campaign for labour standards gets strident and stringent. Incidentally, the US and the European Union (EU) together account for 80 per cent of India's total apparel exports and the retail stores which stock up apparel from developing countries have lately been crying hoarse over alleged harsh treatment to labours in exporting countries.
These concerns presumably arise out of the prodding from their own governments which find protectionist sentiments in times of trouble a facile course to resort to. Official sources told The Hindu that the move by the AEPC is thus a pre-emptive one by the authorities here because the government had heard the concerns from western countries on the usage of child labour in production of garments by some domestic units.
It is against this sombre scenario the Apparel Export Promotion Council (AEPC) worked out on a comprehensive compliance code for ethical sourcing for the apparel exports from India. This stems from both a conviction and recognition of the crucial linkages between ethical trade and economic growth.
So, a project christened “Driving Industry towards Sustainable Human capital Advancement (DISHA)” was flagged off in a bid to sensitise the apparel exporters on a ‘code of ethics' covering all critical facets of social and environmental concerns plaguing the industry.
Under the project DISHA, Rs 2 lakhs would be spent per unit while participants from the industry would cough up Rs 25,000 each with the Textile Ministry having made available Rs 6 crore in 2011-12, the inaugural year, to cover as many as 400 units in different parts of the country based on a cluster approach. The initiative to enable manufacturers focus on good work practices and prevention of child and trafficked/forced labour was deemed a salutary step for sustainable growth of the industry.
AEPC Chairman Mr.A.Sakthivel said the Council conducted a series of stakeholders' forum in different parts of the country with programmes that had a bearing on child labour, freedom of association, proper wages and capacity-building.
Given the fact that the AEPC has taken this step to alert and apprise of the small and medium exporters, it is a testimony to the ability of domestic organisations to grasp the underlying undercurrents in global commerce while taking on board the social concerns of development. International Trade Centre (ITC) has performed a comparative analysis of AEPC's common compliance code with eight other major global and national standards in apparel sector and found that DISHA fairs very good on the social norms.
geeyes@thehindu.co.in
