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'Expect more job losses April onwards' – Mr Vaid, AEPC
12
Feb '09
Mr Rakesh Vaid, Chairman, AEPC
Mr Rakesh Vaid, Chairman, AEPC
The Bangladesh garment industry was in the news recently, on their achievement in overtaking India in apparel exports to the US. This news has come on the back of a negative growth rate reported by the RMG industry in the last few months, with the sector now feeling the real pinch.

The garment manufacturing industry is very labour intensive and nearly 500,000 workers from the industry have already lost their jobs since the unfolding of the economic crisis in September, last year and the percentage of layoff is projected to increase substantially in the coming months according to most of the trade associations.

Mr Rakesh Vaid, who is the Chairman of the Apparel Export Promotion Council (AEPC), which represents the interests of over 6,600 apparel exporters said, “Shipments to the US and the EU, which constitute about 77 percent of apparel exports from the country have been hit hard by the global recessionary trends”.

He added by saying that, “till now the exporters had been cushioned by the fall of the rupee against the dollar, which depreciated by 18 percent in 2008, but with eroding margins and pricing pressures leading to a fall in per unit prices, the situation is expected to turn grim in the coming days”.

Mr Vaid was categorical, when he said, “business from the overseas buyers is shifting to Bangladesh and Vietnam on the strength of their lower operating costs who are quoting discounts of 12-15 percent, mainly due to lower labour costs and taxes in those countries”

He had a note of warning when he said that, “Order books of Indian companies was running thin and if things do not improve by then, massive layoffs can be expected April onwards", and asked the government to raise export draw back duties to make the sector more competitive in the global arena.

Mr Monteksingh Ahluwalia, Deputy Chairman of the Planning Commission, came to the rescue of the garment sector, when he observed that the government needs to take urgent measures to help the apparel industry.

Fibre2fashion News Desk - India

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