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The domestic organised apparel category, which had witnessed slowdown in sales, is expected to bounce back with 15 per cent growth, according to projections by the Clothing Manufacturers Association of India.
“With the relief in excise there had been a surge in demand which tapered off due to uncertain economic conditions. The past few months have been difficult for multi-brand retailers but now with a new stable Government, we expect the organised apparel industry to record 15-20 per cent growth in the festival season,’’ said Rahul Mehta, President, CMAI and Vice-Chairman of International Apparel Federation. After the removal of 10 per cent excise duty on branded apparel, the category has witnessed 10-12 per cent growth in 2013.
The domestic apparel industry is estimated at ₹2 lakh crore of which unstitched garments such as sarees and dhotis comprise ₹50,000 crore. The organised retail sector is smaller at ₹40,000 crore.
Exemptions In its pre-budget memorandum, the CMAI has requested exemption of basic import duty and education cess on industrial garment machinery. It has also sought removal of apparel from the packaged commodity Act and recommended reduction in abatement rate applicable on import of clothing to 20 per cent from the current 70 per cent.
Pushing for quick implementation of GST, Mehta added, “Currently, there is a system of multiple tax regime with many indirect taxes levied on goods and services before it reaches the final consumer. So GST (Goods & Services Tax) should be brought in at the earliest to reduce high input costs which also reduces the industry’s competitiveness in the international markets.’’
Apparel index The CMAI has set up the domestic apparel index to gauge the health of the apparel market. “It would be like BSE index in apparel serving the stakeholders as a reference point to help them make informed decisions,’’ added Mehta.
It is also pushing for the promotion of handlooms in modern trade outlets and by associating with events like the Lakme fashion week.
CMAI is organising the 59th national garment fair from June 23-25 where 737 apparel brands would be participating. “We expect the fair to change the mood of the apparel industry,’’ Mehta added.
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