In an interview to ET Now, Rahul Mehta, President, CMAI, talks about the contribution of the garment sector to India's overall export numbers
Edited Excerpts:
Where do you see growth really come by because essentially India’s exports in total have expected to grow by 15% to 18% what kind of a contribution will this particular industry the garment industry have when it comes to India’s exports?
Well as you know garment industry is one of the leading exporters in India. It is also the most labour intensive, and that is why I think, it is an industry which is supporting the government’s main objectives of increasing employment within the country. It is also the fifth largest exporter in the world of garments. We are the leading exporters of textiles. After a few years of static export growth, we are seeing between 15% to 18% growth between April and June. I anticipate that this growth wi ..
There will be a certain amount of a blip due the GST rules coming in and therefore the duty drawback rates will be impacted. But as of now the government has announced that up to 30th September, the government will permit exporters to continue their business dealings as per the old norms and that will see a certain amount of stability.
The government will have to take into account the huge plethora of embedded taxes which are still not covered under the GST and therefore ensure that the adequate duty drawback support is given to the industry to continue its growth in exports. We have taken several steps, the government has taken steps in terms of the package that they announced in the latter part of last year which has given some amount of relief in terms of labour laws, the industry has taken certain steps in terms of opening ..
So give us a sense as to how much growth India has recorded in FY17 for the garment industry I believe it was about 15% and if you could just tell us what kind of growth is anticipated next year?
Well last year the apparel exports were in the region of $17 billion and I anticipate the growth of anywhere between 17% to 20% growth in April to March 2017-2018.
What about the currency appreciation do you think that can play a role in the garment industry in terms of lower realisations?
Yes, if there is the sudden appreciation of the rupee the garment exports could be affected because we are in a price sensitive market but a stable currency rate whether it is at 64 or 65 or 66 I think what the garment exporters look for is a certain amount of stability so that the order negotiations and business can happen with a certain amount of certainty in the pricing but I think it has remained in the region of anywhere between 64.50 and 65 and I think that should be adequate to protect ou ..
Do you think that at the current rate of about 63-64 that India is still competitive versus the likes of China, Bangladesh, Vietnam?
I think both the industry and the media, if I can say so will have to look beyond currency whether. 5% to 10% plus or minus will not really impact the business to that extent. Yes, if tomorrow if it were to go down from 64.5 to say 61 or 62 then certainly the exports will be very badly impacted.
I know you have touched upon GST impacting the industry but let us talk about the long term outlook of this massive tax reform, in the second half of the year when things have settled down what kind of an impact do you expect?
Well I have personally welcomed the GST and I think our industry has by and large welcome the GST. I have to record my appreciation to the government for having brought about a very reasonable and a fair GST. By and large there are a few issues that are still pending which we are talking to the government about and I think in the long run this will be a very very positive impact on the industry but if you are talking about specifically exports I think the government will have to take into accoun ..
Source: Economictimes.indiatimes.com
