Indian government under its 11th Five Year Plan has chalked out ambitious plans of exporting 6 billion apparel pieces at US $ 34.02 billion (Rs. 1, 53,100 crore) by 2011-2012.
This target is a pipe-dream considering the fact that exporters are reeling under severe order crunch and will be unable to even reach last years’ export level, according to Mr. Amit Goyal, President, Confederation of Indian Apparel Exporters (CIAe).
During the tenth Plan period, exports of readymade garments had increased at the annualized rate of growth of 13.72 percent. The major increase was witnessed in 2005-06 when it increased by 28 percent.
However, the appreciation of the rupee has hit the exporters below the belt. And there is no respite coming from the government.
The situation is alarming as export orders have nose-dived by 10-15% and for the first time in the apparel export history, India will end 2007-2008 fiscal in negative, stressed Mr. Goyal.
The export orders are on decline as India is unable to offer competing prices. The orders are going to countries like China, Bangladesh, Sri Lanka.
Even a country like Indonesia, which was not a big time exporter is on the global scene because its industry is able to compete on price front, CIAe President informed.
Considering the present scenario, apparel industry which was termed as a ‘sunrise industry’ will fade into oblivion in near future.
The government keeps on harping about the fact that garment is the mainstay of Indian textile exports. However, no support is coming forth from the government to sustain exports leave apart increasing exports.
The situation is such that many of the units have downed their shutters and others would be forced to cease their operations if the government does not lend its support to overcome the problems of rupee appreciation.
It is high-time that government works out some package for exporters who have been hit by the rupee, which has appreciated by over 11% since January this year, touching a nine-and-half years’ high mark of 39.57 to a dollar, Mr. Goyal pointed out.
The mass closure on account of decline in exports, CIAe President said, will hit the work-force very badly and thousand and lakhs will be become jobless.
Presently, apparel exporters employ 2.5 million people and the government envisages that another 2.5 million work-force would be required to achieve the target of US $ 34 billion by 2011-12.
Indian government should realise that apparel exporters are finding difficult to sustain current production operation and would reduce the work-force. So there is no question of additional employment in the future, he said.
The UPA government should seriously consider that apparel export sector, which has tremendous potential for employment, investments and growth should be supported for benefit of the industry and country at large or should it be treated as an orphan and left to die, he questioned.
Mr. J. B. Jain, Managing Director of Rupam Exports informed that the so-called relief package which the government claims to have provided the exporters is an eye-wash. The higher drawback rates were justified considering the refund of duties which need to be reimbursed to the exporters.
Indian government is leaving no stone unturned to ensure that we are out of business. It has hit one more nail in our coffin by hiking the minimum wages of tailoring units.
We now have to shell out Rs. 4300 as minimum wages to workers which is nearly 25% higher when compared to Rs. 3400 paid as minimum wages till may 2007 as said by J.B. Jain.
Service Tax is another tax which is has given a severe blow to the exporting community. No doubt, the government has waived of service tax on transport of goods from dock to dry dock.
However, these waivers are of no use to the Apparel exporters as the main area which needs the government attention is the service tax on Commission and Air and Sea freight which is still not addresses said Mr.Goyal
Apparel exporters have no future, points out Mr. Prakash Thakkar, Managing Director, Jal Exports. “I am willing to close down. Infact, I have started to reduce my business, reduce my staff to ensure a smooth exit from the apparel export business,” he says.
This is the worst period I have ever seen in my 27 years of business and I believe the worst is yet to come, says Mr. Thakkar.
Generally in the month of September, apparel exporters have order in-hand till March-end. However, this year orders have tried up. Exporters do not have order till October-end, he informs.
The Apparel & Textile Industry is going through its worst times and now it is not the survival of the exports but of the Industry says Mr.Goyal
