Apparel Industry in India is passing through turbulences. There is a serious down slide in textile and apparel exports since the last eight months, leaving tens and thousands of exporters and their employees in a quandary. In view of this critical scenario on May, Sunday, the acting Finance Minister, Mr Piyush Goyal and Minister of Textiles, Ms Smriti Irani, along with senior representatives of Ministry of Textiles and Finance hurriedly met the senior officials of Apparel Export Promotion Council (AEPC), along with leaders from apparel and textile industry , to understand the issues being faced by the entire apparel industry.
In a two hour long meeting held in North Block, the acting Finance Minister noted the concerns of the Industry with regard to the huge blockages in GST refunds since the roll out of GST and the slow disbursements in RoSl (Rebate of State Levies). According to AEPC, due to the blockages of working capital, because of the blocked GST refunds and slow disbursements in RoSl – the industry has not been able to book orders in the peak season, and hence loosing out to its competitors, in a big way.
“AEPC expresses gratitude for the speedy response from our Honourable Minister of Textiles in presenting critical industry issues along with senior representatives of industry to Honourable Finance Minister and his team. For this important meeting, the Industry came together, from Apparel, Made ups and Textiles to present a unified perspective that looked at the range of issues —- making India competitive in exports, expanding growth, and employment. Industry apprised Finance Minister about the crisis faced across industry — in embedded and inverted taxes not being considered for refund as well as the huge delays in receiving GST/ROSL claims,” informed Mr. HKL Magu, Chairman, AEPC.
Over 90 per cent of apparel manufacturers are in the MSME sector with limited financial capability. “Finance Minister has instructed his team to urgently identify central and state embedded taxes and work out a reimbursement mechanism. Also, Ministry will expedite GST and ROSL refunds in a time bound manner. FM assured all possible support from his Ministry to enable exports growth and creation of jobs by the employment intensive Apparel, Made ups and Textile industry. Industry has also assured that with our competitive position restored, we would be able to regain lost market share, further consolidate these gains and create gainful employment in shortest possible time,” Mr Magu added.
The AEPC study shows that the industry has witnessed a reduction in the drawback and RoSl benefits by over 5 per cent of FoB since the pre GST period. This, coupled with the disadvantage of around 10 per cent faced by the industry vis-a-vis its competitors in the major markets like EU, due to lack of preferential access, had led to India loosing out to Bangladesh and Vietnam in a big way.
The apparel industry is today at USD 17bn, but the industry is optimistic of recording a 20 per cent growth in exports by next year, if the level playing field is offered along with facilitation of faster GST and RoSL refunds. “We are also confident of a pickup in investments and jobs, if the industry is offered some long term employment-linked incentives,” Mr Magu asserted.