INDIAN GARMENT INDUSTRY AT A GLANCE IN 2012 - 2013

http://www.indianmirror.com/indian-industries/2013/garment-2013.html Indias garment industry is one of the mainstays of the national economy. It is also one of the largest contributing sectors of Indias exports worldwide. The garment industry accounts for 14% of industrial production, which is 4% of GDP and employs 45 million people and accounts for nearly 11% share of the countrys total exports basket. Indias exports of Textiles and Clothing together clubbed as garments is pegged at USD 64.41 billion by the end of March, 2017. Exports of garment products from India have increased steadily over the last few years, particularly after 2004 when textiles exports quota was discontinued. Textiles exports in the financial period of 2012- 2013 witnessed a negative 7.55 percent growth in dollar terms although there was a 6.00 percent growth in rupee terms. During the year 2012-13, Garments accounted for almost 39% of the total textiles exports. The total textile exports during 2012-13 was valued at Rs 137619.44 crore as against Rs 129829.30 crore during the corresponding period of financial year 2011-12, registering an increase of 6.00 percent in rupee terms. In US dollar terms, the same was valued at US$ 25263.74 million as against US$ 27328.06 million during the corresponding period of previous financial year registering a decline of 7.55 percent in US$ terms.

Major fillip to textile sector

Commerce and Industry Minister, Anand Sharma on Thursday unveiled the Foreign Trade Policy (FTP) for 2013-14 containing a number of sops including extension of the popular zero duty EPCG scheme to all sectors, extension of TUFs benefits to EPCG, promotion of incremental exports, widening the market and product focus scheme and extension of interest subvention scheme till March 2014. Majority of the measures are aimed at giving a big boost to the labour intensive handicrafts, handloom, ready made garments and man made fabrics sectors which form a major chunk of the textiles exports which have been on the decline for the past many months. In addition to this, a new reformist policy for Special Economic Zones (SEZs) was also put in place. Announcing the initiatives as part of the annual supplement to the FTP is primarily aimed at giving a big push to exports which showed a decline of 1.76 per cent to $300.6 billion during 2012-13 and pushed up the trade deficit to $190.91 billion. Spelling out the details of the policy, Mr. Sharma said the Export Promotion Capital Goods (EPCG) scheme, which allows exporters to import capital goods at zero duty, would stand extended beyond March 2013 and would be applicable to all sectors. "We have decided not only to extend the zero duty EPCG scheme beyond March 2013, but also merge it with 3 per cent EPCG scheme. Now, the zero duty EPCG benefit will be available to all sectors," he said much to the delight of the representatives of the textiles sector sitting in the audience.

The Commerce Minister also announced that the reduction of Export Obligation (EO) in the case of domestic sourcing of capital goods under EPCG authorisations has been reduced by 10 per cent to promote domestic manufacturing of capital goods. In order to encourage manufacturing activity in Jammu and Kashmir, it was decided to reduce the specific EO to 25 per cent. Mr. Sharma said at present 2 per cent interest subvention scheme is available to certain specific sectors like handicrafts, handlooms carpets, ready made garments, processed agricultural products, sports goods and toys. He said the scheme has been further widened to include 134 sub-sectors of engineering sector. Similarly, the new FTP announced widening of scope of utilisation of duty credit scrip. Similarly, he said Norway has been added under Focus Market Scheme and Venezuela has been added under Special Focus Market Scheme taking the total numbers under these two initiatives to 125 and 50 respectively. "About 126 new products have been added under Focus Product Scheme from sectors like engineering, electronics, chemicals, textiles and pharmaceuticals. About 47 new products have been added under market Linked Focus Product Scheme (MLFPS) with two new countries Brunei and Yemen added as new markets. The MLFPS has been extended from March 2013 to March 2014 for exports to US and EU," he added. Mr. Sharma said exports of high tech products would be incentivised and would be notified separately by June 30, 2013. The Incremental Export Incentivisation Scheme has been extended for the year 2013-14. The government has also agreed to include additional countries under this scheme. 53 countries of Latin America and Africa have been added with the objective to increase Indias share in these markets. In addition to this, imports of cars/vehicles have been permitted through designated ports only which include ICD at Faridabad and Ennore in Tamil Nadu.

Garment sector seeks 5% duty credit scrip

NEW DELHI, APRIL 19: Hailing the measures announced in the Foreign Trade Policy (FTP), the Apparel Export Promotion Council (AEPC) has asked the Government to take few more steps to boost the garment sectors shipments. We have asked for the duty credit scrip of 5 per cent for the garment industry, which is used to offset the Custom duty, AEPC Chairman A. Sakthivel said in a statement today. Commerce and Industry Minister Anand Sharma, who also handles the textiles portfolio, had yesterday unveiled a slew of incentives for labour-intensive sectors like textiles, engineering and handloom. Sakthivel hoped that the measures would help in increasing garment exports, which were hit hard by the global demand slowdown.

Measure like expansion of zero duty EPCG scheme, announcements on promotion of incremental exports and widening the ambit of market and product focus scheme will help in promotion of garment exports from India, he said. The Export Promotion Capital Goods (EPCG) scheme, which allows exporters to import capital goods at zero duty, would be extended beyond March. Regarding free trade agreement between India and EU, he said that the proposed pact would provide huge opportunities for the sector. Our exports to EU have a major share of 45 per cent. It will be a game changer for the garment industry. We hope that it will be signed soon, he added. Indias textile exports declined 5.9 per cent year-on-year to $14.1 billion during the AprilSeptember period.

Textile exports likely to grow by 15% in 201314

NEW DELHI, MAY 17: The government on Friday said it expects textile exports to grow by 15 per cent in 201314, marking a turnaround for such shipments that declined by 4 per cent to $ 22.2 billion during AprilFebruary last fiscal. We hope textile exports will do better this fiscal. It is expected that these exports would grow by 15 per cent in 201314 as the demand from western markets is rising, Minister of State for Textiles Panabaaka Lakshmi said after inaugurating an exhibition titled Shilpangan here. The sixday long fair was organised by industry chamber FICCI along with Rural Non Farm Development Agency (RUDA) wherein exhibitors are showcasing a wide variety of handicraft items from Rajasthan. The focus of the exhibition is to encourage and demonstrate the artefacts and other products developed by selfhelp groups, small and medium industry and craftsmen. On demand for Indian textile items, Lakshmi said, The exporters are getting good number of orders from the US market but the demand in European market is yet to pick up. Besides, she said, exporters are exploring emerging markets such as Latin America, Africa and Russia. The US and EU together account for 60 per cent of the countrys total textiles exports. During AprilFebruary 201213, Indias textiles exports declined by 4.1 per cent to $22.25 billion compared to the same period previous fiscal on account of weak demand from western markets.

AEPC pleads for incentive, customs duty cut to boost textiles export
NEW DELHI, JAN 14: To boost textiles exports, apex garments industry body AEPC on Monday sought measures like customs duty reduction on synthetic fabric and adequate availability of credit at affordable rates in the next budget. In its prebudget proposals, the Apparel Exports Promotion Council (AEPC) Chairman A Sakthivel also asked for removal of service tax on services like exhibitions. Services provided to local or government authority by the Export Promotion Council should be exempted from the service tax, he said. Grantin aid to the Export Promotion Council for overseas events or exhibition should not be treated as consideration for any service rendered to government and hence, should not be liable to service tax, Sakthivel said in a statement. There is an urgent need to reduce customs duty to flat 5 per cent on synthetic/blended fabric, he added. The government should also provide 5 per cent incentive under Market Linked Focus Product Scheme for exports made to other than traditional markets, because exports to non traditional markets have been growing and it needs the adequate support at right time, he added. AEPC also sought reduction in excise duty on branded garments. Garments imported from Bangladesh do not attract any customs duty and also their prices are lower than the Indian products. Considering the employment and also to face the competition from the Bangladesh products, we request to remove the excise duty imposed on branded readymade garments, he said. Sakthivel also demanded compensation to exporters against the state levies such as octroi till the introduction of GST. AEPC also asked for enhancement of the depreciation rate on plant and machinery from 15 per cent to 25 per cent. Indias textile exports declined 8.5 per cent during the AprilDecember period because of slowdown in major markets like the US and EU.

Apparel exports can treble on central incentive: AEPC

COIMBATORE, JAN 5:

The apparel industry will be able to treble exports within three years if the Centre allows it to utilise 15 per cent of the export turnover to import raw materials such as synthetic fabrics that are not available in the country, the AEPC has said. The industry is on the revival path from the crisis-ridden past three years and 2013 will augur well for textile exports, particularly apparel and knitwear garments, going by increased orders in the last two months, A Shaktivel, Chairman, Apparel Export Promotion Council (AEPC) said last night at Tirupur. The heads of export bodies will meet the Textile Ministry on January 7 in Delhi and discuss the issue of import of raw materials such as synthetic and polyester fabrics and yarn, which are not available in India, Shaktivel said. He was speaking on the sidelines of an interaction with major textile connected associations organised by AEPC. Shaktivel said it was difficult to import the materials under Advance Linked Scheme as small exports will not be able to cope with it. As such the industry was getting 5.33 per cent duty drawback on fabrics and 3.3 per cent on yarn, he said, adding that once polyester fabrics and yarn are available, the industry will tap the winter garments market, which was very negligible now. The overall impact would be that there would be a sharp increase of export by three times in the next three years from the present $14 billion, he said. Tirupur too, which had turnover of Rs 13,500 crore in 2012, will witness similar growth, said Shaktivel, who is also the President of Tirupur Exporters Association.

Garment industry unhappy with 25 bps repo rate cut

COIMBATORE, MARCH 19: The reduction in repo rate would not stir up investments by entrepreneurs in the export sector, feel industry insiders. Reiterating the need for a separate chapter for exports in the monetary policy and the need for lowering of interest rates for boosting the growth of the domestic manufacturing sector, Apparel Exports Promotion Council Chairman A. Sakthivel said that the readymade garment exports have to be treated on par with labour intensive sectors such as agriculture and handloom. The garment sector in competing countries pays interest at 6 to 7 per cent, but even with the 2 per cent interest subvention, the effective rate of interest here is between 9.5 and 10 per cent. With todays announcement, the interest rates could soften by 0.25 per cent. This is miniscule, he added. The country at this juncture should counter growth and check inflationary trends. Therefore, a positive growth with check on inflation can improve manufacturing, he said.

Textile exporters seek sops to sustain competitive edge

NEW DELHI, DEC. 27: The textile industry is far from satisfied by the recent sops announced by the Government to boost exports. Industry players point out that labour, power, raw material and transportation are making the end products more expensive compared to other competing markets. Additionally, the industry is seeking that all textiles be put under one basket rather than have different classification for sops. A. Sakhtivel, Chairman Apparel Export Promotion Council (AEPC), said, Buyers are not putting more orders due to the economic turbulence in their economy specifically in Western Europe, the US and Canada. Besides, there is stiff competition from Vietnam and Bangladesh in the US market and from Turkey in the EU market. The Indian market share is bitten by these (Vietnam, Bangladesh and Turkey) suppliers. We need to grab the market share lost from China. Moreover, increasing wage rates, hike in oil prices and inputs are other causes of worry as they dent exporters profits, he said. Earlier this week Commerce and Industry Minister Anand Sharma announced a number of measures to boost flagging exports which included extending the two per cent interest subvention for another year till March 31, 2014. The Government also added seven new countries to Focus Market Scheme. Textile export is suffering because raw materials are phenomenally high priced. This makes the end product expensive by 15-30 per cent than other competing markets, an industry player said. While the ready-made-garment has got two per cent interest subvention, the home textile has been left out. Apparels and home textile are both cut and sew products. Hence, there should not be any distinction between the two, industry said. AEPC, which made a presentation to the Directorate General of Foreign Trade, highlighted the issue of non-availability of fabric. The textile industry had proposed that import of cotton yarn be permitted without licence at flat fixed customs duty rate, equivalent to all industry rate of duty drawback. Exports of finished product made from such imported yarn be allowed at corresponding rate of duty drawback, an industry observer said. On the issue of price stability in cotton yarn and fabrics, AEPC had proposed that import of cotton yarn and fabrics at fixed customs duty, equivalent to rate of drawback rate, may also be permitted and drawback may be allowed on export of readymade garments manufactured from such imported cotton yarn/fabrics at pre-determined drawback rates, industry trackers said.

Textiles industry seeks cut in excise duty on man-made fibres

NEW DELHI, JAN 8: Apex industry chamber for textiles CITI today demanded that the Government reduce excise duty on man-made fibres to 8 per cent in the forthcoming Budget to boost the sectors growth. In its pre-Budget memorandum to Finance Minister P. Chidambaram, the Confederation of Indian Textiles Industry (CITI) said: The duty on man-made fibres and their raw materials may be reduced to 8 per cent from the current 12 per cent. It argued that the duty reduction will not lead to revenue loss for the Government. This may not lead to revenue loss since demand and therefore production will increase, leading to increased revenue, it said in a statement. CITI said the increasing cost of production in China has opened up huge opportunities for the Indian man-made fibre based textiles industry to expand its market share. It has also sought abolition of customs duty and special additional duty on man-made fibres as it would help the industry source fibres from global markets during times of shortage or a sharp increase in domestic prices. It also sought increase in the exemption limit for service tax to Rs 15 lakh from the current Rs 10 lakh. Besides, it has demanded reduction in the rate of service tax to 10 per cent from 12 per cent to lessen the burden on the industry. CITI has also suggested converting the mandatory duty of 12 per cent on branded garments and made-ups to 8 per cent optional duty. Garments and made-ups are the most labour intensive and final products in the textiles chain and play a major role in creating and sustaining all textile products, it said. Further, to boost textiles exports, it has suggested to the Finance Minister that lending of export credit to the sector may be treated on a par with lending to the priority sector in the matter of interest rates. The industry suffers disadvantages in the areas of infrastructure and input costs when compared with its competitors. Affordable export credit would assist in handling these problems partly, it said. Indias textile exports declined 5.9 per cent year-on-year to $14.1 billion during AprilSeptember 2012 because of a slowdown in major markets such as the US and EU.