Apparel exporters are facing serious challenge of payment default in the pandemic phase and there is no strong support for them in this regard.
What’s come as an additional blow for the exporters is that if the buyer does not pay for the shipped goods, exporters would have to refund/return the drawback and rebate of state and central taxes and levies (RoSCTL) with interest to the Government.
But now there’s some relief for the exporters! If reports are to be believed, the Ministry of Commerce is working on this issue and planning to bring out some mechanism very soon, which can save the exporters from this adverse situation.
Time and again, various associations of the apparel industry have demanded Government support in this regard.
It is pertinent to mention here that various apparel manufacturers have faced huge losses due to default payments, as some overseas brands have refused to pay them.
As per industry estimate, only Noida has faced such losses of around Rs. 250 crore.
There are some schemes of Government in this regard like Export Credit and Guarantee Corporation of India (ECGC), but these mainly give protection in cases where client files for bankruptcy. Industry has been insisting more relief under this scheme for the exporters.
