Complaining that increasing cost of fabric was making garment exports from India unviable, the Apparel Export Promotion Council has urged the Government to institute a probe to find out why this was happening.
“The Government must probe reasons for fabric prices jumping by over 50 per cent in the past two months, which has forced many garment exporters to cut production or honour commitments at a loss’’, said AEPC Chairman, Rakesh Vaid.
Addressing a press conference here on Monday, he complained that besides fluctuations, availability of fabric has also become a serious issue. “Weaving units are not making any delivery commitments’’.
He warned that if the issue was not resolved quickly, by January, there could be massive job losses on an “unprecedented’’ scale. “I am not in a position to give the exact figures. But, it would be in lakhs. That is for certain’’.
Stressing that the situation was “very serious’’, he said latest figures showed that exports in October had declined by 17.62 per cent to $603 million in the year-on period, topping the fall of 7.32 per cent in the first half of the current fiscal (April to September), compared to last year.
Urging the Government to introduce fiscal relief measures, apart from probing the reasons for increasing fabric prices, he said stimulus packages and other steps announced so far have had negligible impact on the apparel industry. “They were merely either in the form of release of withheld benefits or restoring benefits withdrawn earlier. We have not got anything more.’’
In particular, he called for hike in the duty drawback rates to 13.25 per cent, extension of the two per cent duty-free scrips for exports to the U.S. and Europe, abolition of countervailing duty on textile machinery and extension of service tax exemption for all export-related services. The exemption must be given upfront instead of as refund later.