Apparel manufacturing in India falls 4.7 per cent in the month of February 2018. This is the tenth straight month when the industry reported a decline in apparel production.
In addition to this, a 9.9 per cent decline in apparel production was also observed in the April-February period, as per the latest IIP figures released last week. The implementation of GST (Goods and Services Tax) is seen as the major reason for this decline.
“The industry has been facing troubles like the reduction in the duty drawback and RoSL, capital blockage due to slow GST refunds and uncertainties about the future of export subsidies have adversely impacted the industry,” stated HKL Magu, Chairman, Apparel Export Promotion Council (AEPC).
The cost disadvantage due to the aforementioned policy issues is affecting India’s relative position as an apparel sourcing destination.
As per the IIP figures, there has been a month to month decline in apparel productivity, from a positive growth of 1.3 per cent in April 2017 to a 5 per cent decline in May.
The IIP figures reveal 3.2, 5.1, 6.4, 7.2, 11, 13.1 and 13.5 per cent decline in apparel production in the month of June, July, August, September, October, November and December, respectively. Apparel production declined to 10.7 per cent in the month of January this year.
AEPC feels that policy-makers need to bring in an early resolution to help the industry regain the lost opportunities in becoming a world leader in apparel exports.
The apparel body earlier apprised Ministry of Textiles, Ministry of Commerce Drawback Committee, NITI Aaayog, Parliamentary Standing Committee and others about the crisis going on within the industry.