Tirupur: With exports falling for the third consecutive month in December, industrialists within the knitwear city are worried about downward trade development within the readymade clothes (RMG) segment. RMG exports from the rustic plunged 40% year-on-year (y-o-y) in October and by means of 10%-13% y-o-y in November and December respectively.
Exporters imagine that the central government was yet to realise the significance of providing incentives or the will for FTAs (Free Trade Agreements) for RMG with US and European nations to boost enlargement. "While the central government is making macro-economic corrections including demonetisation and GST, it has failed to realise the importance of hand-holding support like providing the right rate of duty drawback and other incentives," stated Tirupur Exporters' Association (TEA) president Raja M Shanmugam.
Earlier, the federal government stated that if corporations pay GST, they might be capable of get enter credits. But the federal government did not bother in regards to the effect of aid in incentives ranging from responsibility downside, rebate of state levies (RoSL) and merchandise exports from India scheme (MEIS), Raja Shanmugam stated.
After consistent requests from the industrialists, the federal government came ahead to extend MEIS—that too until June, from 2% to 4%. Still overall deficit of the incentives stands at 2.7% compared to the pre-GST length.
So, Tirupur knitwear exporters, who operate on skinny profit margins because of stiff competition, were not able to cite attractive charges to international buyers, stated A Sakthivel Regional Chairman Federation of Indian Export Organisations (Southern Region).
"Once exporters lose buyers, it would not be easy to regain the business relationship. The knitwear industry has already been weakened due to multiple reasons including depreciation in the US dollar. The implementation of GST has become a death knell blow to the industry," Raja Shanmugam stated.
"There was a notion that in developing countries providing sops to the export firms was not necessary. But it is wrong. The government should provide sops and adequate infrastructure to ensure the sustainability of the industries," he stated.
Referring to a contemporary excursion of TEA office-bearers to Vietnam, Raja Shanmugam stated, "We are self-certifying our nation as a traditional textile-oriented business hub but many new competitors like Bangladesh, Vietnam and Cambodia have overtaken India in the RMG exports and made-ups."
For instance, Vietnam, which had entered into the trade simplest twenty years in the past, is exporting textile products to the music of Rs. 2.2 lakh crore annually despite being an importer of cotton, he pointed out. India's trade stands at simplest Rs.1.6 lakh crore, he stated. "Their government's incredible support and Free Trade Agreements with the largest garment importing countries were major reasons for Vietnam's success," he stated.
"There is a vast gap between the policy makers and the industry. The government should bring in knitwear welfare board, a dedicated research institute, and labour oriented measures, apart from restoring all the incentives," senior business officials stated.
Exporters imagine that the central government was yet to realise the significance of providing incentives or the will for FTAs (Free Trade Agreements) for RMG with US and European nations to boost enlargement. "While the central government is making macro-economic corrections including demonetisation and GST, it has failed to realise the importance of hand-holding support like providing the right rate of duty drawback and other incentives," stated Tirupur Exporters' Association (TEA) president Raja M Shanmugam.
Earlier, the federal government stated that if corporations pay GST, they might be capable of get enter credits. But the federal government did not bother in regards to the effect of aid in incentives ranging from responsibility downside, rebate of state levies (RoSL) and merchandise exports from India scheme (MEIS), Raja Shanmugam stated.
After consistent requests from the industrialists, the federal government came ahead to extend MEIS—that too until June, from 2% to 4%. Still overall deficit of the incentives stands at 2.7% compared to the pre-GST length.
So, Tirupur knitwear exporters, who operate on skinny profit margins because of stiff competition, were not able to cite attractive charges to international buyers, stated A Sakthivel Regional Chairman Federation of Indian Export Organisations (Southern Region).
"Once exporters lose buyers, it would not be easy to regain the business relationship. The knitwear industry has already been weakened due to multiple reasons including depreciation in the US dollar. The implementation of GST has become a death knell blow to the industry," Raja Shanmugam stated.
"There was a notion that in developing countries providing sops to the export firms was not necessary. But it is wrong. The government should provide sops and adequate infrastructure to ensure the sustainability of the industries," he stated.
Referring to a contemporary excursion of TEA office-bearers to Vietnam, Raja Shanmugam stated, "We are self-certifying our nation as a traditional textile-oriented business hub but many new competitors like Bangladesh, Vietnam and Cambodia have overtaken India in the RMG exports and made-ups."
For instance, Vietnam, which had entered into the trade simplest twenty years in the past, is exporting textile products to the music of Rs. 2.2 lakh crore annually despite being an importer of cotton, he pointed out. India's trade stands at simplest Rs.1.6 lakh crore, he stated. "Their government's incredible support and Free Trade Agreements with the largest garment importing countries were major reasons for Vietnam's success," he stated.
"There is a vast gap between the policy makers and the industry. The government should bring in knitwear welfare board, a dedicated research institute, and labour oriented measures, apart from restoring all the incentives," senior business officials stated.
Continuous fall in exports worries garment makers in Tirupur
![Continuous fall in exports worries garment makers in Tirupur]()
Reviewed by Kailash
on
January 31, 2018
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