India’s apparel exports have dropped about four per cent for the year 2017-18.
An early resolution is needed to prevent a crisis particularly when global demand has picked up.
What is the significance of Indian Apparel exports?
Apparel exports has been growing steadily, it contributes 4% of GDP and account for nearly 15% of India’s total exports.
The textiles and apparels industry is one of the largest employers of women and helps in creation of jobs for skilled and semi-skilled labours.
It also has a world market share of 4.4% and has potential to increase up to 8%.
What are the prevailing issues in Indian apparel export?
Global apparel market is most competitive, faster growth of exports from Bangladesh and Vietnam concerns Indian exports.
The apparel manufacturing and exporting units are facing a funds crisis due to delays in processing of refund of taxes.
Duty drawback was initially curtailed and later reduced after the implementation of GST in July 2017.
While the Union increased the duty drawback understanding the woes of exporters, States who pay major share of duty drawback are yet to rebate the taxes.
This funds crunch has pushed the apparel manufacturers and exporters to increase the costs up to 5% which has led to loss of market and thereby decreased exports.
What measures are needed to improve apparel exports?
The flow of funds to the manufacturing and exporting units has to be eased.
Sate component of the GST refunds have to be released quickly to avoid losing markets further which will directly affect the labour intensive sector.
Better infrastructure and smoother policies with less paperwork will help to compete with these countries and improve apparel exports.
