Ready-made garment exports dip in October after surging in previous month
CHENNAI : After seeing an increase of around 25 per cent in exports last month, ready-made garment (RMG) exports fell by nearly 41 per cent in October.
Exporters have attributed the drop to the fall in order bookings as ambiguities related to GST have put India in a disadvantageous position against other competing nations.
RMG exports rose to Rs 10,707 crore in September 2017 from Rs 8,583.55 crore in the same month a year ago. In dollar terms, these figures were $1.662 billion as against $1.284 billion. Of the total RMG exports, 52 per cent were in the woven segment and 48 per cent is knitwear. After a three-month gap, exports had seen positive growth.
In October, RMG exports dipped by around 41 per cent in rupee terms to Rs 5,398.08 crore from Rs 9,100.75 crore a year ago. In dollar terms, it dropped by 39.22 per cent to $0.829 billion from $1.364 billion a year ago.
Exporters have also urged the GST Council to immediately refund input tax suffered on export products from July to October. They have added that in case the system is not ready, the refund may be provided based on claims by the exporters and verification can be done at a later stage.
TEA President Raja Shanmugam said that people are now becoming used to the system. In the past three months, while global demand was increasing, exporters could not cater to it due to tax-related confusion.
"Now, we don't have a choice but the GST makes our products costlier compared to other countries," said Shanmugam. He added that the September numbers are not sustainable in the current environment.
Another exporter agreed and said unless India signs a free trade agreement with European countries, exporters will be in deep trouble. Competing nations have a duty advantage, which India does not possess.
Customers have also started asking for a reduction in prices after the rupee started strengthening against the dollar. This comes at a time when the cost of doing business is increasing for exporters.
Source:- Dailyshippingtimes.com
