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20-May-2015

Apparel Export Promotion Council chairman, Virender Uppal has said there has been a vacuum in a policy support in the readymade garment (RMG) manufacturing export industry and urged the government to look into the demands of the industry for boosting RMG exports.

He suggested inclusion of 2 per cent fabric within 5 cent per overall entitlement for improving fabric base under Customs Notification no. 10/2015-Cus dated 1.03.2015 from budgetary announcement.

Uppal also demanded support from the government's monetary policy with an announcement of 3 per cent interest subvention scheme w.e.f. 1.4.2014 to partially mitigate high cost of lending, which is hovering around 11 to 12 per cent interest rates, as compared to 4 to 6 per cent in competing countries.

He said round-the-clock clearance of import and export must be implemented by Customs for ease of business.

Government has not given any indication about the finalization of India-EU FTA, CEPA with Canada, etc., which needs to be implemented on urgent basis so as to mitigate the duty disadvantage suffered by India vis-a-vis competitors like Bangladesh, Cambodia, Vietnam, Pakistan etc. in the major markets, Uppal pointed out.

The EU market constitutes 41 per cent of the India's RMG exports. Conditions in major markets like EU, continues to be subdued. Further, India is facing duty disadvantage of 9.6 per cent compared to competing countries like Bangladesh and Pakistan which have zero duty access under LDC/GSP+ status at EU GSP Scheme.

The USA constitutes 21.7 per cent of India's RMG exports and the market condition in USA is still on the path of gradual recovery. The prospects of considerable improvement in the market are rather limited due to competition from countries like Vietnam, Mexico which have zero duty access under preferential treatment with the US, an AEPC statement said.

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