A slump of 3.46% is witnessed in Apparel exports in F.Y. 2018-19 in comparison to the year-earlier period. Last financial year the Apparel exports were worth $16.13 billion while in the year-earlier period it was worth $16.71 billion. The primary reason behind this stagnation is that the exporting units could not adjust readily to the new rates under the Goods and Services Tax (GST) regime. Shipments hit on 7% reduction in the incentives that the exporters were receiving earlier played a major role in this recession.
According to A. Sakthivel, vice-chairman, Apparel Export Promotion Council (AEPC), under the GST, there was almost 7% cut in the incentives given to the exporters and they also had to adapt the new system.
At the beginning of the GST regime itself, it was attested that working capital is facing blockages due to the postponement in the refund of states levies and other mandatory refundable taxes, the slowdown in overseas pick sustained till the first quarter of the F.Y.
And also in the first quarter of F.Y.19 India’s apparel export estimated to have declined by 17% due to the downtrend demand in developed countries because of their poor economic activities.
Chandrima Chatterjee, an advisor to the council, said that despite the sluggishness of the global apparel market, leaders in the segment such as Bangladesh and Vietnam encountered growth. “We need to strategise to position Indian products in the international market,” she said.
Apparel exports have fallen down from $16.71 billion of the year-earlier period to $16.13 billion of last financial year, however, in rupee terms, there is a hike of 4.66 % in exports.
According to Siddhartha Rajagopal, executive director, The Cotton Textiles Export Promotion Council, Export of entire cotton textiles, including cotton yarn, witnessed almost 10% upsurge in the last financial year as and when compared to the year-earlier period. Apparel exports also elevated by 15% in March after the declaration of refunds of embedded taxes made by centre. This should certainly accelerate exports this year.
