Apparel industry recovers ₹400 crore from defaulters

The garment industry, which is reeling under severe cash crunch, has recovered ₹400 crore in last three months from retailers who had defaulted on payment due to weak demand.

The Clothing Manufacturers’ Association of India has formed a separate committee to negotiate with retailers and recover the dues. The Association has also formed a system to alert the members on the credit profile of buyers so that they do not fall prey to wilful defaulters.

Rahul Mehta, President, CMAI, said the recovery committee of the association has taken up long-pending cases and negotiating to recover ₹1,000-1,500 crore.

The growth in garment sector was hit by economic slowdown and demand for electronic items growing with attractive offers from e-commerce websites, he said, at a function to announce the 61{+s}{+t} National Garment Fair starting on June 29. The largest-ever fair is expected to attract 780 brands and 40,000 retailers over three days.

“I believe that some sense will soon prevail in the working of ecommerce companies as they cannot keep on buying topline. The angle investors who had invested millions of dollars would start looking for the bottomline,” he added.

The domestic organised garment sector registered a growth of 12 per cent to ₹44,800 crore last fiscal against a growth of seven per cent in fiscal 2013-14.

As a nodal agency for the Government’s ‘Skill India’ programme, the Association was trusted to set up 50 skill centres across India by March 2017 and train 35,000 workers. It has already opened 35 apparel training centres in Andhra Pradesh, Gujarat, Karnataka, Tamil Nadu, Telengana and Maharashtra in last four months. In Maharashtra, there are two skill centres at Baramati and Tarapur while another one will go live at Kalyan, near Thane, on 100 acres early next year.

Babubhai Ayer, General Secretary, CMA, said the skill centres are planned near the apparel industry so that trained people can be employed immediately. “We plan to set up another three centres at Vasai, Umargaon and Vapi-Daman region,” he said.