Apparel exports belie expectations in 2005

06 Jan '06

2 min read

President of Clothing Manufacturers Association of India Premal Udani informed that they are disappointed by the growth in exports achieved in 2005. Against the expectation of 25-30 per cent growth we have witnessed an increase of just 15 percent.

Growth of India's apparel and clothing exports in the first year of dismantling of quotas in the world textile trade has disappointed the industry.

India exported $6.5 billion worth of apparel in 2004-05.

After decades of control, the global textile trade was freed from quota restrictions on January 1, 2005.

The main reason for the sluggish growth in exports was attributed by Udani to the low drawback rates.

"During the year the drawback rates were changed. Now they are 6-6.5 per cent. If the drawback rates are increased to 15 per cent apparel exports from India would double in three years," he said.

Udani said drawback only takes care of excise and custom duty while the exporters have to pay plethora of other state and central taxes.

"We are exporting our taxes which are making us uncompetitive," he said.

Udani said another reason for sliggish growth was the lac of adequate capacity with the manufacturers.

"Due to inflexibility in labour laws manufacturers were unwilling to expand as fast as they would like to. If flexibility is given the exports can really grow and we will see a sudden spurt," he said.

To put their point of view across the apparel exporters had met CPI (M) General Secretary Prakash Karat on Tuesday. Udani said a lot of exporters gained by dismantling of quotas while many fell by the way side.

"Buyers now insist that a manufacturer follow good labour practices. Those who have failed to do so have fallen by the way side," he included.

Udani said to improve productivity of Indian apparel industry and help it move up the value chain various apparel export organisations were trying to bring in foreign consultants.

The Economics Times

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