Relief likely for crisis-hit apparel exports sector

New Delhi, Jan. 23 The Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, would convene a high-level meeting of different government departments on February 5.

The meeting is being called to address the core concerns of the apparel industry, particularly its export segment, badly hit by the ongoing recession in the overseas markets of developed countries, according to the Minister of State for Commerce and Power, Mr Jairam Ramesh.

Garment fair

Addressing the garment industry representatives at the ongoing India International Garment Fair in Gurgaon, Haryana, where over 350 established apparel manufacturers and exporters have been showcasing their speciality wares, Mr Ramesh said that the need for tackling the crisis in the garment industry arose out of the fact that in 2008-09, the garment exports from India would be lower than Bangladesh, while Vietnam would overtake India before long.

While India would end up exporting garments worth $8.8 billion this fiscal, Bangladesh is poised to export $12 billion worth of garments and China (excluding Hong Kong) at $115 billion.

He said that Vietnam would export $6 billion worth of garments this fiscal and would soon overtake India, if “we do not get our act together to improve the competitiveness of the Indian garment industry”.

Women workers

Considering the fact that six million people (a majority of them being women) work in the garment industry, the need for bolstering the industry in terms of safeguarding the livelihood concerns of people working in the industry assumes added significance, Mr Ramesh said.

Hence, he said, the “garment industry needs much more focused support than the real estate sector which some people have been championing”.

Earlier, in a presentation to Mr Ramesh, the Apparel Export Promotion Council Chairman, Mr Rakesh Vaid, said that all major announcements by way of fiscal stimulus measures were either a release of withheld benefits or restoration of benefits recanted lately.

He cited the case of Technology Upgradation Fund Scheme (TUFS) and Central sales tax/terminal excise duty payments and subvention of credit of 4 per cent withdrawn from October of which 2 per cent has been restored now.

He said exports in November were $621 million, a decline of 11 per cent compared withNovember 2007 and this fiscal apparel exports would be $8.78 billion, down 9.4 per cent as compared to 2007-08, he said.

Reviving activity

Pleading for a series of steps to revive activity in the crucial garment industry to help workers survive, the AEPC chief said all duty drawback rates might be notified at the rate of 14.61 per cent effective from September 2008, along with introduction of interest-free loans for investment in machinery and zero duty import of capital good scheme.