The Apparel Export Promotion Council (AEPC) last week urged the Indian government to come out with an amnesty scheme in case there is non-fulfilment of export obligations as traders are facing issues with raw material supply because of the COVID-19 pandemic. AEPC chairman A Sakthivel wrote a letter to commerce and industry minister Piyush Goyal on the issue.
As India’s apparel trade is deeply integrated with the global value chain, it has been affected by the disruption in both imports and exports, his letter said.
Under some export promotion schemes like Advance Authorisation and Export Promotion Capital Goods schemes, import of machines and raw materials used to make exportable products is allowed at zero duty but with an export obligation. Exporters are of the view that in such a scenario, meeting these obligations would be a bit difficult for them, according to a news agency report.
Uncertainties are developing over timely deliveries of imports of raw materials like fabric, and accessories supplies, and exporters are facing a tough situation with regard to export orders as global buyers are asking for deferment of consignments.
What is needed is to “bring out an amnesty scheme for non-fulfilment/short-fulfilment of exports under various export obligation schemes, especially in a force-majeure (unforeseeable circumstances that prevent someone from fulfilling a contract) situation such as the present one,” he said.
These uncertainties, coupled with a weak demand position in major markets, have started affecting the order position, production schedules, inventory pile up, working capital and export realisations, Sakthivel added.