Garment exporters suffering recessionary trend – GEA
The worldwide recession which started after the collapse of Lehman Brothers during last year is showing signs of recovery, as revealed by the latest data released by the US Government and World Trade Organisation (WTO). Indian Government has also expressed confidence in the speed of the economy to recover and stabilize.
However, in an exclusive interaction with Fibre2Fashion Surinder Anand, Executive Secretary, Garments Exporters Association, pointed out the Garments Exporters are still facing crisis because of worldwide recessionary trend and low unit value realization from overseas markets and it would take some more time for the world economy to be normal and the clouds on the Garment Exports to evaporate.
Mr.Anand further observed that the declining trend in the growth rate of garment exports has continued during the current year due to worst ever global slowdown which started during 2007-08 and intensified to a crisis in 2008-09. As against target of US$ 11.6 billion for the year 2008-09, the exports were only US$ 10.1 billion dollar, short by over 13% and only 4% above 9.7 billion dollar achieved during the year 2007-08.
GEA had drawn the attention of the concerned authorities regarding difficulties being faced by Garments Exporters because of global economic slowdown, adverse fiscal and trade policies of the Government and withdrawal of some of the export sops which were earlier granted to exporters.
As the relief packages so far announced by the Government in the Budget proposals and Foreign Trade Policy have failed to provide adequate compensation to exporters, Mr.Anand has stressed the need to provide immediate fiscal relief to make garment exports competitive by increasing the duty drawback rates by 5 per cent and restoring 4 per cent interest rate subvention and also grant full income tax exemption under section 80 HHC for the next three years to help the exporters to overcome the present crisis.
The Government should also completely exempt exporters from Service Tax to avoid blockage of capital of the exporters as the procedure for refund is the time consuming, resulting in unnecessary delays and harassment. The garment exporters at present are going through a serious crisis and Government must come forward to extend the necessary fiscal relief, said Mr.Anand. Apart from taxation relief, the Government should also reduce the transaction costs by simplifying administrative procedures. These include reducing delays at custom clearance of goods, improving loading and unloading of cargo and upgrading infrastructure to avoid congestion at various ports.
The Minister of Commerce & Industry, Mr.Anand Sharma, while announcing the new Foreign Trade Policy had also stressed the need to “follow a mix of policy measures including fiscal incentives, institutional changes, procedural rationalization, enhanced market access across the world and diversification of export markets. Improvement in infrastructure related to exports; bringing down transaction costs, and providing full refund of all indirect taxes and levies, would be the three pillars, which will support us to achieve this target. Endeavour will be made to see that the Goods and Services Tax rebates all indirect taxes and levies on exports.”
GARMENTS EXPORTERS ASSOCIATION