The Hindu Business Line : Readymades' export to restricted countries up

THE country's exports of readymade garments (RMGs) to quota restricted countries picked up pace during the first quarter of the current fiscal, notching up a moderate growth of 4.40 per cent in terms of volume but a robust 9.22 per cent in terms of value when compared to the same period of 2003-04.

Figures compiled by the Apparel Export Promotion Council (AEPC) for the latest month show that exports of readymade garments to restricted countries during April to June 2004-05 amounted to 325 million pieces valued at $1,304 million, or roughly Rs 5,880.70 crore.

Exports to the US, the single biggest market for the country, amounted to 120.5 million pieces valued at $572.1 million, representing an increase of 6.35 per cent in terms of volume and 6.06 per cent in terms of value, when compared to April-June 2003-04.

Exports of RMGs to the European Union (EU) during the period under review amounted to 190.8 million pieces valued at $688.1 million, signifying an increase of 4.49 per cent in terms of volume but a relatively high 13.38 per cent in terms of value.

Exports to Canada during April to June 2004 have amounted to 13.7 million pieces valued at $43.8 million, which is a decrease of 11.04 per cent in terms of volume, and 7.98 per cent in terms of value when compared to April-June 2003-04.

As exports of RMGs during the latest month of June 2004 have been 85.2 million pieces valued at $377.5 million pieces, against $316.3 million during the comparable month of June 2003, the Chairman of the AEPC, Mr A. Saktivel, told Business Line here that the rising RMG export trend could be sustained in the coming months.

He, however, cautioned against dramatic increase in the second and third quarters of the current fiscal, as they are not normally known for any scorching pace of growth.

He expressed the hope that as against last year's RMG exports of $5.2 billion, the current fiscal exports would fetch close to $6 billion.

Mr Sakthivel said that the recent Budget proposals for the garment segment were `disappointing' as they did not address the core concern of the industry, which is on the threshold of a dramatic turnaround in its fortune with the imminent end to the quota regime governing global trade in textiles and clothing by the end of 2004.

He said that as services tax has been raised from 8 to 10 per cent and a new 2 per cent cess is being levied on the industry for education, suitable fiscal adjustment in the form of revision in the rates of drawback and duty entitlement passbook credit (DEPB) credit should be given to the industry.

Mr Sakthivel maintained that as the Budget did not give much relief to the garment industry, the forthcoming annual modification to the Export-Import (Exim) policy would address the unfinished work for fostering an enabling milieu to the industry.

He said that the 3 per cent duty-free import allowed to the industry for embellishment should be hiked to at least 10 per cent under which the industry could be allowed to source even raw material and capital goods for modernisation and upgradation of technology in the competitive garmenting business.

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