Export of textiles and apparel have been falling every months despite the government’s efforts to give the segment a boost.
Data compiled by the Confederation of Indian Textile Industry (CITI) showed textile and apparel export fell 13 per cent to Rs 186 billion in January, against Rs 215 billion in the corresponding month last year.
Textile export slumped 13 per cent to Rs 97 billion from Rs 111 billion in the year-ago period; apparel export declined 14 per cent to Rs 89 billion.
With the rupee appreciation and preferential treatment given to Least Developed Countries (LDCs) by importing nations, the government needs to ease refund of Integrated Goods and Services Tax (IGST) and on Return of State Levies (ROSL), says the trade. Also, to ensure importing countries treat exporters at par with their counterparts in LCDs.
“The sharp decline in exports of cotton textiles by 16 per cent, apparel by 14 per cent and man-made textiles by 7 per cent contributed to the performance. The share of textile and apparel export declined to 12 per cent in January against 14 per cent in January 2017,” said Sanjay Jain, chairman, CITI. Textile and apparel export between April 2017 and January 2018, first 10 months of the financial year decline of 4 per cent, to Rs 1,871 billion from Rs 1,940 billion a year ago.
However, import of yarn, fabric and made-ups rose 15 per cent to Rs 99 billion in from Rs 86 billion.
“Effective import duties after GST have come down sharply, making import cheaper for the domestic industry by 15-20 per cent,” said Jain.
The government had in the Union Budget announced a 19 per cent increase in a special package from Rs 60 billion earlier. While announcing the package in 2016, the government had linked this to employment generation and increase in export.
“The government needs to address core issues first, with immediate release of IGST which remained blocked since July 1, 2017. This is choking of working capital,” said Ujwal Lahoti, chairman of the Cotton Textile Export Promotion Council and chairman of Lahoti Overseas.
“The industry needs immediate relief in the form of a minimum 2 per cent on the Merchandise Exporters from India Scheme on cotton yarn and a ROSL package for fabrics and cotton yarn, to retain competitiveness in the global market. Also, the government should immediately levy customs duty across the value chain to restrict import,” added Jain.