“The industry has been benefitted by the Rs 6,000-crore special package for the garment industry, announced in June 2016, which aims at facilitating new investment, exports and employment. We expect the budget to supplement it, taking the introduction of GST also this year,” Ashok Rajani, Chairman, AEPC told Fibre2Fashion in an exclusive interview.
He also said that the companies that are scaling up should be incentivised and the condition of term loan component of 50 per cent should not be imposed since there is no interest subsidy for the loans being taken from the banks. Clubbing of license should also not be permitted under annual advance license for the enhanced Duty Drawback Scheme.
“The entire 12 per cent provident fund (PF) should be contributed by Central government for removing the need for additional registration and compliance requirement of payment of employer’s PF contribution first and then taking its refund. Some of the notifications pending under the special package like the notification for optional deduction of EPF for the employees less than Rs 15,000 per month should be issued,” added Rajani.
Talking about the apparel market, he said, “The global apparel markets have been stagnant since 2015. For India, the growth in 2015-16 was a nominal 0.2 per cent and in 2016-17 it is expected to be similarly modest. However, India's domestic market is growing, which is an opportunity for the apparel manufacturers.”
India’s overall apparel exports witnessed a decline of 0.2 per cent between April and December owing to the decrease in import from major markets like US and UAE. However, India’s apparel exports grew in non-traditional markets such as Russia, Oman, Tanzania, Argentina, Iran and Qatar.
When asked which factors are most likely to influence Indian apparel exports this year, Rajani said, “The revival of the EU, USA and UAE markets – the top three markets for India is critical for export enhancement. The continuation of Merchandise Exports from India Scheme (MEIS) and effective roll out of the Special package will be critical as these are biggest support that the industry has presently. Besides this, bilateral trade agreement with UK, post Brexit, and India-EU FTA can be huge positive influences on apparel export.”
He noted that the delays in the roll out of the special package, non implementation of some of the important support announced and the stagnation in EU and US markets resulted in a curtailed growth potential. The growth witnessed during the months of August, September and October was proof enough that the package is an answer to the industry need for support. (KD)
Click here to read the complete interview.
Fibre2Fashion News Desk – India
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