Apparel Export Promotion Council (AEPC) is expecting around Rs 5,000 crore fresh investments to flow into the sector during the current fiscal which may create as many as two million jobs with textile booster package of Rs 6,000 crore announced by the government.
AEPC chairman Ashok G Rajani said that based on the initial feedback he has received, around Rs 5,000 crore may flow into the industry in fresh capex this fiscal year itself as government announcement of textile package comes as a game changer.
This additional investment into the apparel sector, which has not seen any investments for years, alone can create as many as two million jobs this year, also the impetus will be on the near-doubling of the capital subsidy to 25 per cent of ones investment.
The industry will be able to meet the governments target of creating 10 million jobs and 30 billion US dollar in export earnings by 2020, Rajani said without any doubt, it is very much doable. In fact, he is optimistic that they should be easily crossing these targets as the entire industry is very happy with the package and bullish on investments.
However, the 9.5 per cent duty on exports is still a worry, which competitors from Vietnam, Bangladesh and Cambodia don’t pay.
Also the enhanced duty drawback of 12.25 per cent, up from 7.25 per cent, is the biggest takeaway from the package which leaves the ball in the court of the industry as the government has given it the best deal possible.