India’s apparel exports, particularly from Punjab, Haryana and Uttar Pradesh, have seen a steep decline due to high input cost, delay in Goods and Services Tax refund and stiff competition from Bangladesh, Vietnam, Pakistan and China.
The three states have been the worst sufferers in the declining apparel exports, which continues to fall for the seventh month in a row. The country has experienced about 23 per cent decline in apparel exports in April 2018 compared to April last year.
The decline in exports is giving sleepless nights to around 200 exporters in Punjab and Haryana, said Harish Dua, managing director of Ludhiana-based KG Exports. He said the input cost in Punjab, Haryana and Uttar Pradesh was much higher compared to the Tiruppur cluster in Tamil Nadu.
Concerned over the steep fall in exports, apparel exporters met Finance Minister Piyush Goyal and Textiles Minister Smriti Irani recently. “The Finance Minister has assured exporters that the government will expedite the refund of the GST and remission on state levies (RoSL) in a time-bound manner and has directed the bureaucrats to do the needful,” a member of the Apparel Export Promotion Council (AEPC) said.
Declining business is a major concern for exporters. “The government should swing into action and must do something to boost the exports, otherwise many units would be forced to close down operations,” said Dua.
Total readymade garment exports in April this year were around $1.34 billion while it was $1.74 billion in the same month last year. In rupee terms, exports in April 2018 were around Rs 8,860 crore, a decline of 21.4 per cent compared to the corresponding period last year.
“Previously (2016-17), the industry had witnessed a strong growth, but now exports are in a negative territory since October last year. It is because of the continued backlog in the GST and RoSL, which is affecting the business sentiments,” AEPC chairman HKL Magu said.
According to garment sector experts, due to the increasing un-competitiveness of Indian apparel exporters in the international market, many exporters have increased their exposure in the domestic market. “This will not be good in the long run for India, which used to be a dominant player in the international apparel export market,” Dua said.
India’s readymade garments export to the international market in the previous financial year was around $16.71 billion, compared to $17.38 billion in 2016-17.
