The incentive package for the garments industry announced by the Centre recently will help Indian exporters beat competition from countries like Bangladesh and Vietnam and fill the space being vacated by China in the global market for clothing, according to the Apparel Export Promotion Council (AEPC).
Garment exports from India will increase by $30 billion over the next three years once the incentive package for the textile sector announced recently is fully implemented, the industry body stated.
“With China already vacating space in the global market for garments, there is a huge opportunity for Indian exporters to fill the gap. The new incentives will make the garments sector in the country more competitive as exporters will be able to match the low prices offered by Bangladesh and Vietnam,” AEPC Chairman Ashok Rajani told
In 2015, India’s garments exports were worth $17.1 billion, which was 3.6 per cent higher than $16.5 billion in the previous year, according to industry figures.
China, on the other hand, exported garments worth $162.5 billion in 2016, which was lower by 3.5 per cent compared to what it exported the previous year.
New incentives
The new incentives, which include enhanced duty drawback coverage with refund of state levies not being refunded so far, additional funding under the Technology Upgradation Fund Scheme (TUFS) and additional contribution towards the Employee’s Provident Fund (EPF) by the government, will help Indian exporters fight competition from countries such as Bangladesh, Rajani said.
Bangladesh is the second largest exporter of garments in the world with exports at $30 billion in 2015. It is followed by Vietnam, Italy and Hong Kong, with India in the sixth position.