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Ready-made garment exports revives

By T E Narasimhan
June 25, 2019 19:08 IST
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The exporters are optimistic that the industry will grow by 8-10 per cent and it can improve further if the government helps the industry.

Ready-made garment exports from the country are once again headed north owing to various measures provided by the central government, including higher rebate.

This follows a downturn in exports experienced in the last two to three years because of increased competition and high cost of exports from the country, among others.


Garment exports rose by nearly 14.05 per cent to $ 1.528 billion in the month of May 2019 from $ 1.339 billion during the same month last year. Industry experts said that despite Indian products being costly by 10-15 per cent, buyers are still interested to source from India.

The exporters are optimistic that the industry will grow by 8-10 per cent and it can improve further if the government helps the industry.

Garment exports have been gradually coming down year-on-year in the last two financial years. In 2016-17, total garment exports was $ 17.361 billion.

After introduction of the goods and services tax (GST), demonetisation and other reforms, which made Made-in-India products costlier, exports started declining. In 2018-19, exports dropped 3.43 per cent to $ 16.14 billion from $ 16.71 billion in 2017-18.

Identifying issues such as lower incentives and cost pressures in the industry, the government increased rebate of state and central taxes and levies by 3.2 per cent for some items and 4.5 per cent for the rest of the items.

The units have come out of the impact, especially the ministry of micro, small and medium enterprises or MSMEs, said Raja M Shanmugham, president, Tirupur Exporters’ Association.

He pointed out that in the last six months, the average export growth was about 31.15 per cent over the corresponding period in 2017-18 for Tirupur. Government data shows that from October 2018, exports increased by 12 per cent.

“I feel that we are finally turning the corner after stagnancy or slight de-growth.

"Government support has gone up.

"Bangladesh is becoming expensive and Vietnam is showing signs of reaching the peak of its capacity,” said Rahul Mehta, president of Mumbai-based Clothing Manufacturers Association of India.

The growth story continues during the current fiscal as compared to negative growths during the two months (April and May) last year.

Exports grew by 4.45 per cent in April and 14.05 per cent in May compared to the corresponding months of the previous year (in dollar terms).

Factors which are in favour of India include China’s decison to exit the textiles sector, Bangaldesh’s labour becoming costly and Vietnam reacing a kind of plateau.

These have made India an important destination once again.

Photograph: Danish Siddiqui/Reuters

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T E Narasimhan in Chennai
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