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Chairman AEPC vows to attain US$40 bn by 2030

Sudhir Sekhri, Chairman, Apparel Exports Promotion Council (AEPC)

“Our target to reach 40 billion USD of RMG export by 2030 can be a reality and my duty is to take every possible step to reach this target,” Chairman, AEPC

Shri Sudhir Sekhri, has taken over as the new Chairman of Apparel Export Promotion Council (AEPC). Being into the business of readymade garment manufacturing for more than four decades he is currently Managing Partner of Trendsetter International.

After a 5-year stint in the family manufacturing & export business of electric welding equipment, he diversified into the manufacturing & export business of readymade garments. He has been an Executive Committee member of Apparel Export Promotion Council. since 1990, Chairman (Export Promotion Committee) of AEPC for several years and Vice Chairman, AEPC for the year 2022 & 2023.

PS: How is it feeling to be chairman of AEPC? It doesn’t feel any different?

Chairman: I have already been the Vice Chairman for two years so was engaged in a lot of responsibilities. Prior to that, I was the Chairman of export promotion committee so I have been very closely involved with the affairs of AEPC vis-a-vis export promotion. So, quite honestly, the only thing is that now I have to look at administrative issues also. Rest everything has been experienced.

PS: So, now that you have taken over as the chairman of AEPC, what are the first few areas that you really want to work on hard?

Chairman: Firstly, we have to speed up the PLI for MMF, we have already requested the government to engage with the mills and the mill sector and speed up the modernization of the MMF textile sector.

India has always found it challenging to meet the global requirement for MMF and diversification of the product is the need of the hour.

India has always been a major exporter in cotton, however, the world buys MMF. We have to fill this gap and unless we have the right fabric and the right processing mills to give us those fabrics as a manufacturer we also cannot go much forward.

PS: So why PLI is not activated even though it came two years back?

Chairman: The government has come up with PLI 1.0, but even though 18 months was the gestation period, we are still waiting for the product to come out and start benefiting from that.

We obviously understand that to set up a new plant with all new machinery, equipment and infrastructure it takes a lot of time.

The government has allowed 12 to 18 months of time for all the beneficiaries of the PLI 1.0. So hopefully, within the next few months, we should start seeing the fabrics that are being made. However, still there will be a gap in demand and supply.  We’ll have to really speed it up more because when to be able to catch up with the global competitors will take another three to four years.

PS: What are the other key areas of focus as the Chairman?

Chairman: Other than that, we need to ramp up our capacities as the export houses in India are still unable to handle core/basic products which are required in huge quantities.

I’m talking about like the chinos, bench shorts and basic products and MMF products. To reach 20 billion from 16 billion which is just about 20-22%, 20% augmentation of capacity is required.

Now we are requesting the Government for a PLI 2.0 scheme, wherein we think that will help us in ramping up production capacities of the garment sector. Thirdly, we are going to focus on skilling our workforce. We are creating about 150,000 skilled workers every year but it is still not enough. To attain the growth that we are targeting i.e 40 BY 2030 we need to empower our workforce with skills.

The skilled workers like tailors and quality checkers are still not sufficient as during the peak season they go to their native villages thereby creating shortage. Now, this is a very strange predicament because on the one hand, we are looking at increasing our exports and on the other when we have capacities fullwe are not able to run our factories because of non-availability of skilled workers.

Another challenge is that the skilled workers are now joining the domestic sector instead of exports. There is no reason why we should have such a huge shortfall of tailors and checkers during the peak season.

PS: The labour problem has been evident for many years why do you think it is not getting resolved?

Chairman: The workers still take advantage of the MNREGA scheme and due to this we lose the crucial 100 days. We need to make some business-friendly labour policies.I know every state has their own policies, but I think our national labour policy should be aligned with ILO. ILO permits 10 hours of workingfor overtime, they have allow 25% over time, however, as per our labour policy, we have to pay double overtime.

If India has to see the growth, the kind of growth that Bangladesh is seeing, then we need to bring in investors.

To achieve 40 by 30 target we need to tweak our policies and make them more business friendly.

PS: What are the biggest he current challenge for the apparel export industry?

Chairman: Well, see, if you want to talk about immediate challenge, yes, Red Sea is a problem. It came all of a sudden when most of the buyers had already planned their orders. If the Red Sea crisis continues, then obviously buyers will be more cautious and will place orders accordingly and will be prepared that the transit time is going to take another 15 days.

The spring-summer deliveries and orders were badly affected. However, over the next season, in spite of the Red Sea crisis, the problem of delivery will get sorted out.

PS: Japan has recently declared recession, US was also expected to make an announcement, in such a scenario what is your take on the future of apparel exports from India?

Chairman: Food and clothing are and will also remain the two basic necessities and even if the recession comes the demand for basic products will be there. Usually, it is the middle level which will get most affected by recession. Speciality retailers get affected the most vis-à-vis discounters or mass retailers. As far as the luxury is concerned it somewhat remains undisturbed.

PS: How have things changed in post Covid era I mean we were anticipating a lot of business coming towards India from China, so what is your observation?

Chairman: The fact that we are still at USD 14 bn and we’ll be closing at about 10% less than last year proves that as per the expectation business did not move towards India.

PS: What exactly AEPC plans to do this year in terms of revival of business?

Chairman: Well, again, like I said, we are going to request the government to announce the PLI 2.0 scheme so that we are able to ramp up our production capacities. Also, we are requesting them to speed up the FTAs also, especially the one with UK. Our total business to UK is about $1.6 billion so even if we have this duty free, we’ll probably see a growth ofabout 20%, which is roughly 0.25 billion dollars. And every drop small of big helps.

PS: Which countries are being focused on in terms of business expansion?

Chairman: One of the focus areas for us is going to be Scandinavia as our business with Scandinavia has not really grown so much and still there is a lot of potential. They have the capacity to buy value-added products also. However, Scandinavia is a very cold country and to serve them we would again require winter product as their winter buying is much higher than summer buying.

PS: There is a change in the income tax rule wherein, you know, every MSME needs to pay the invoice within 45 days. What is your feedback on this new ACT?

Chairman: I personally feel that the Government is trying to help the MSMEs, however, they are actually hurting the MSME’s. In the garment sector most of the suppliers and buyers both belong to MSME’s. So, what is happening is, you have created a war between an MSME and an MSME and while saving one the other is getting hurt.

According to me the same should have happened with the big players rather than the MSME’s AEPC has taken up the matter with the government and they will relook at it. We have not been given any categorical assurance as such, but we are hoping for some solution.

PS: What is your opinion about Bharat Tex?

Chairman: Bharat Tex is going to be a game changer, as we never had the entire value chain of garment, of textiles, under one roof. This is the first such event and I think this is going to be the largest textile event in the world. Unfortunately, what’s happened is that we have not been able to sell our industry the way we should have.

PS: What exactly is your mission for 2024 in terms of Parallel Exports?

Chairman: Even if I am able to increase my export by 10%, then I will be very happy, to be very honest, given the present business environment. So, my mission is to supplement what Bharat Tex is going to do and we need to keep that momentum on and keep badgering.

 

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