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29-November-2017

There is a 15 per cent decline in shipments this year as expected by the garment exporters to 14 billion US Dollar on account of reduced incentive on duty drawback and rebate on certain state levies post the rollout of the goods and services tax (GST). The average duty drawback post GST is 2.25 per cent from 11.5 per cent before GST.

Apparel Exporters & Manufacturers Association (AEMA), President, Vinod Dhawan said, “Because of tardy implementation of GST, we are incurring higher expenditure on compliance and other transaction costs.”

Many apparel exporters are concerned about the competition from Vietnam, Indonesia and Bangladesh and migration of customers to these countries besides the preferential tariff they get in international market. The impact of GST became visible from October and exporters said they are seeing a 7 per cent on year decline in order books.

“In order to stem the decline in exports, it is very important that government to take certain measures as industry is not in a position to bear further losses and in the absence of policy incentives, the sector will be forced to shed jobs," Lalit Thukral, President, Noida Apparel Export Cluster said.

In the coming months if the situation continues, Exporters expect 6 million jobs to get lost. Textile is the largest employer after agriculture and pays Rs 26,000 crore in annual wages. “MEIS increase is nominal and units are closing even though global demand and market are growing,” Lalit added.

Recently, the government doubled the incentive for exporters of garments and made-ups under the Merchandise Export from India Scheme (MEIS) to 4 per cent of value of exports from 2 per cent with effect from November 1, 2017, to June 30, 2018 in a move to boost exports.

- Apparel and Textile News, Apparel Talk, Indian Apparel

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