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Why Is India Not Able To Reach Apparel Export Targets?

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“Basically Bangladesh is growing. Vietnam and India are not growing in spite of having all manufacturers, infrastructure and everything available locally. That means we should have grown much faster and better as compared to these two countries. The thing is that we need labour reforms to run a factory and 75-80% of the Indian garment sector comes from the MSME. Very few are vertically integrated factories. Considering this there has to be labour reforms and more Govt. incentives for export business. Another major factor is that India is not able to come up with any FTA with the US or UK whereas Bangladesh enjoys 10-12 per cent win directly due to their FTA’s with Europe. If the European customer gets the same garment from Bangladesh instead from India, it is automatically 10 per cent cheaper due to the free trade agreement that imposes no duty charge. So if our Govt does not come up with any FTA with the US and UK or others then it is going to be very hard for an even longer time for this industry. The industry is already suffering since 2016 and finally, by the end of 2018, it showed some good signs. So FTA’s, labour reforms and more incentives for the exporters are the three most important issues that Govt needs to look after. Since the last 2-3 years 25 per cent of the units have closed down so industry is moving away from the business and that is again related to lack of support from Govt. There is so much stress because of the fact that it is a labour intensive industry and at the same time an MSME,” Mahesh, Jayshree International, Okhla.

“It’s probably because of the Govt policies that India is still not able to reach new export targets as compared to Bangladesh and Vietnam. Since the GST is applied and drawback has reduced, exports have become very dull. We used to have around 9-10 per cent drawback support and now it is reduced to around 2.5 per cent and that too is difficult to manage. Obviously this is creating a lot of difficulties for the exporters who are interested in doing good business and growing. The buyer is not improving the costs and the Govt is also not supportive about the costs. These are the reasons that exporters are getting demotivated and losing interest in the business as they are not earning enough. That is also a huge reason for India not improving or able to set high goals in exports. The thinnest chances left are also getting erased by the Kejriwal sarkar demanding to search each and every factory. So it becomes really sad for the exporters who are working really hard to do good business.” Aastha Kapoor, Affordable Exports Pvt Ltd., Delhi.

“The Government is responsible for the state of the industry. In India the wages are high and if you look at the Northern garment sector, it is not given any incentives for garment exports as compared to Bangladesh and the newer countries where the minimum wages are much lower. I do think the Govt has to support us in upcoming years. It is a global challenge at this moment. The US and UK markets are very established economies and they are looking for cheaper options to source from. However, I do believe that India has a great potential in the upcoming years. The business in China in decreasing so that also opens up a good chance for India to grow. I don’t think that industry is moving away from the business. If you look at our company for instance, we are very focussed and we are up and ready for the tough times.” Dhruv Kohli, Orient Craft Ltd., Gurgaon.

“India is much better developed than both Vietnam and Bangladesh and that makes the cost of Indian products higher than that of these countries. Vietnam can provide garments way cheaper and so can Bangladesh. That is why I believe we are falling behind in exports. Also, Govt policies are the reason for the garments being costlier and of course they need to be reviewed. I believe it also because the industry is moving away from the business. Both policies and this scenario are equally the reason for poor exports.” P. Vidhyaprakash, Styleman Textiles Pvt. Ltd., Tirupur.

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