The world will come out of current crisis soon – IIGM Vice President
Mr M Prakash, Vice President, IIGM Pvt Ltd
India Industrial Garment Machines (IIGM) Pvt Ltd has witnessed radical transformation since its inception. Its apparel sector has been modernizing energetically to take advantage of the benefits available in a level playing field, of the post quota era.
The Home textile sector is also enjoying an unprecedented growth, with India being seen as a frontrunner to providing quality and designer products to the western markets.
In an exclusive interview with Fibre2fashion.com, Mr M Prakash, Vice President, IIGM Pvt Ltd shared his experience of 17 years in the apparel industry and the changing scenario.
He said, “As regards the today's scenario of the apparel industry, I totally look into a different way. Out of my 17 years of my career in this industry, this is the second time we are seeing the recession (especially for the Garment exporters). The younger generation who passed out from the universities since 1998 have seen only the positives of the industry and economy. Therefore, I feel this correction was required at this point. (Unnecessary values raised in stock market, prices quoted in real estate industry was steep, garment operators and tailors demand in salaries were also looking north).”
Mr Prakash continued, “Let us look into the buyers prospective. Any apparel buyers/ buying houses from all the over the world are also looking for the cuts in expenditure. Therefore the first step is to consolidate their operations in the region. For example, if a buying house had offices in Delhi, Bangalore, Dhaka, Colombo, Pakistan, Thailand, they are shutting down all the offices and consolidating with one office for the region. Whereas this is forcing them to minimise their manufacturers from various locations to one or two locations. Therefore, the Manufacturer who as the USP on a particular product will sure get the business but others will loose out. For example Bangladesh may get all the denim jeans business because they are very strong on basic jeans. India may get lot of formals and design wear.”
Recent RBI cuts repo, reverse repo signals lower interest rates. Discussing if this will benefit the industry, Mr M Prakash stated, “How the industry will gain with the RBI repo cuts and 4 percent ED cuts. Let me ask you this, How many customers did take the advantage of TUF (Technology upgradation fund) when it was introduced few years back. Only few people who had long term plans and with good management teams took advantage of the same and lot of them ignored. Most of our small and medium apparel industry is run by owners and they are not exposed to these advantages.
“However, 4 percent excise duty is a very good relief for the manufacturer. For example, the custom duty on most of the machines have come down, of course the same advantages will be on raw material / accessories procurements also for all the manufacturers. Meanwhile the exporter have another advantage apart from this is to get the dollar/ Euro appreciation against the rupee.”