The Hindu Business Line : Garment industry seeks relief

With an export target of $9.5 billion for the current fiscal, half of which has been achieved during the first-two quarters, the garment industry has pitched for an enabling milieu for attracting more investments, duty remission and fillip to training in garment-making to cater to bulk orders from retail chains.

Disclosing this to Business Line here, the Apparel Export Promotion Council (AEPC) Chairman, Mr Vijay Agarwal, said he has put across these issues at the first joint meeting of the various exporters with the Union Finance Minister, Mr P. Chidambaram and the Union Commerce & Industry Minister, Mr Kamal Nath, at the initiative of the Prime Minister, Dr Manmohan Singh, as an institutional mechanism for interaction here today.

Mr Agarwal said the garment-manufacturing sector could easily absorb substantial portion of unemployed people, provided adequate encouragement is extended to training in garment making through Apparel Training Centres and Indian Technical Institutes.

He said the functioning ATCs within a short span have trained 10,000 people this year and by end of 2007, 25,000 people would be trained. The training period ranges from three months to a year and the trained people are immediately absorbed by the industry, he said.

The AEPC Chairman said the sector is in dire need of huge investments, which could be rendered feasible by extending assistance under the Technology Upgradation Fund Scheme (TUFS). He said quite a number of apparel units were availing themselves of the TUFS and there is a need to upgrade the apparel industry in the coming years to face down competition in the quota-free period.

"Not only TUF scheme should be extended beyond March 2007 for a spell of five years but also the garment sector needs to be given better interest reimbursement," Mr Agarwal said, adding that the textile/apparel machinery should be allowed to be imported at nil duty under TUFS and at five per cent duty otherwise.

In his presentations, Mr Agarwal underlined the need for making the garment export more competitive through reduction in the transaction cost as per the suggestions made by his colleagues earlier in the Council and by ensuring refund of all the duties whether Central or State.

Stating that more fiscal fillips and corrections of anomalous duty structures are required to augment export of garment made of synthetic clothes, Mr Agarwal cited the case in which the textile value chain from yarn to garments attracts excise duty at four per cent for products from natural fibre and eight per cent for products from manmade fibres.

As excise duty on manmade fibres is currently eight per cent, this should also be brought down to four per cent.

Mr Agarwal said the import of high performance specialty fibres and yarns are round $10-15 million a year by the industry. He said a normal shirt being exported for about $5 a piece, a shirt containing Lyocell fibre can be exported for as much as $9-10 a piece.

In order to gain a value addition of $3 a piece, the custom duty on Spandex or elastane or lycra, lyocell, specialised grade polyamide (Nylon) and flax could be reduced to 5 per cent (flat) and exempted from countervailing duty and special additional duty (SAD), the AEPC Chief said.

More Stories on : Readymade Garments | Modernisation | Exports & Imports

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page