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Garment exporters expect 15% dip in shipments this year

29-Nov-2017
Garment exporters expect 15% dip in shipments this year

Garment exporters expect 15% dip in shipments this year

NEW DELHI: Garment exporters expect over 15% decline in shipments this financial year to $14 billion on account of reduced incentive on duty drawback and rebate on certain state levies post the rollout of the goods and services tax (GST). 

NEW DELHI: Garment exporters expect over 15% decline in shipments this financial year to $14 billion on account of reduced incentive on duty drawback and rebate on certain state levies post the rollout of the goods and services tax (GST). 


“Because of tardy implementation of GST, we are incurring higher expenditure on compliance and other transaction costs,” said Vinod Dhawan, President, Apparel Exporters & Manufacturers Association (AEMA) on Tuesday. 

Various apparel export bodies also voiced concern on competition from Vietnam, Indonesia and Bangladesh and migration of customers to these countries besides the preferential tariff they get in international market. The impact of GST became visible from October and exporters said they are seeing a 7% on year decline in order books. 

“Therefore it is extremely important that government addresses the issues raised by the industry in order to stem the decline in exports, as industry is not in a position to bear further losses and in the absence of policy incentives, the sector will be forced to shed jobs." said Lalit Thukral, President, Noida Apparel Export Cluster. 

Exporters expect 6 million jobs to get lost in the coming months if the situation continues. Textile is the largest employer after agriculture and pays Rs 26,000 crore in annual wages. 


Recently, the government doubled the incentive for exporters of garments and made-ups under the Merchandise Export from India Scheme (MEIS) to 4% of value of exports from 2% with effect from November 1, 2017, to June 30, 2018 in a move to boost exports. 


“MEIS increase is nominal and units are closing even though global demand and market are growing,” said Thukral added.


Source:- Economictimes.indiatimes.com

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