Garment sector upset over proposed rise in electricity tariff

21 Dec '10

2 min read

The garment sector in the country has expressed concern that if the recent budget proposal of raising the electricity charges by 9.5 percent from next month onwards is accepted, it would lead the already waning garment industry of the country to further deterioration.

The garment industry was already suffering losses due to the end of the GSP plus facility. Besides, other factors like increase in the rates of cotton and polyester, freight charges, fluctuations in currency rates as well as competition extended by other countries with GSP plus benefits have all further added to its difficulties.

Now, to add to the above difficulties if the electricity rates, too, are also raised it would further deteriorate the already crippling industry, and may even lead to its permanent closure. Thus, the garment sector is strongly opposing the proposal of raising the electricity charges.

Many countries like Bangladesh, Vietnam and Pakistan, which initially lagged far behind Sri Lanka in terms of apparel trade, are now strongly competing with Sri Lanka after the withdrawal of the GSP plus concession in August, this year.

Reviving the GSP plus concessions is the only way out for the country to revamp its garment sector.

A duty of 9.6 percent is being charged on the domestic products, compelling the buyers to pay a higher cost for the local products than what they pay for other country's products. The garment sector has, thus, appealed the government to once again sit for discussion with the European Union (EU) for renewal of the GSP plus facility.

Fibre2fashion News Desk - India