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The Textiles Ministry has expressed concern over the continuous fall in exports of readymade garments over the past few months and has sought more benefits from the Commerce Ministry to help units that find it difficult to cope with the GST regime.
“At a recent meeting chaired by the Commerce and Industry Minister, Suresh Prabhu, on sectoral export growth strategy, the Textiles Secretary pointed out that things were pretty dismal for the sector. The Commerce Minister decided to hold a separate meeting with the Textiles Ministry officials to devise a strategy to boost the sector,” a government official told BusinessLine .
The Textiles Ministry has been asked to come up with more details of the segments that are most affected and how things could be improved, the official added.
India’s apparel exports have been plummeting since October 2017, with sharp fall of 16.6 per cent to $13.3 billion in May 2018. “The main problem faced by the garments industry is the blockage in GST refunds, slow disbursements in Rebates on State Levies (RoSL) and the sharp decline in RoSL rates which has led to working capital drying up. While the larger units somehow manage to survive, many small units are not in a position to take orders,” the official explained.
In a meeting with Finance Minister Piyush Goyal last month, the Apparel Export Promotion Council of India had pointed out that exporters were not able to book orders in the peak summer season and were losing their markets to competitors from other countries such as Bangladesh and Vietnam.
To help garments exporters, the Centre has already decided to extend the popular Merchandise Export from India Scheme for garments and made-ups, which was to expire this month, indefinitely. Under the MEIS scheme, garments and made-ups exporters get duty exemption scrips, freely transferable for cash, worth 4 per cent of their total exports.
The rate of incentive for the two sectors was doubled to 4 per cent from 2 per cent in October 2017 when exports had started slipping.
“The government is already sensitive to the needs of the apparel exporters. But clearly there is a need to do more. Hopefully some strategy will be firmed up when the Commerce Minister meets Textile Ministry officials separately,” the official said.
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