Apparel business from Tirupur is at the crossroads following the rising trade imbalances in the global apparel markets vis-à-vis Indian context due to the changing duty levies and export-import policies of various countries and ‘not so’ manufacturer-friendly domestic scenario.
Duty free imports recently allowed from Bangladesh, one of the major competitor countries, into the Indian market and flooding of lower cost Chinese products are dashing the hopes of those apparel manufacturers who lost the edge in export market to diversify into the domestic sector.
Knitwear manufacturers feel that they are presently ‘between the Devil and the deep sea’ like situation and a drastic intervention from the government side was needed to help them sail forward.
“A country like Turkey has now increased the import duty to 50 per cent to promote the local garment business fraternity, resulting in our exporters losing many customers there.
“Similarly, emerging markets like South Africa now have high import duty.
“At the same time, we are also losing the competitive edge in the traditional European Union and United States of America markets too as countries like Bangladesh have been able to forge free trade agreements in the same market facilitating duty free exports,” T. R. Vijayakumar, a prominent garment exporter and coordinator of Sripuram Trust formed of stakeholders in textile sector, told The Hindu .
Industry experts in the hosiery centre pointed out that despite the recent major fire incidents in Bangladesh garment sector, the products of that country were able to find better penetration into niche markets than Indian garments as significantly much smaller percentage of the buyers in the global market are only looking for social compliances.
Rising electricity charges, poor quality of power and high interest rates on credit are some of the impediments that have been adding to the woes of the manufacturers here.
“We lag behind in efficiency too. If China is able to produce 75 garment pieces in a unit time, we are able to produce only around 40 pieces in the same time,” manufacturers pointed out.
S. Dhanajayan, an industry consultant/ chartered accountant, opined that India should take diplomatic initiatives on a war footing to sign at least sector-specific free trade agreements and get duties rationalised so as to provide level playing fields for producers here.
