AEPC has asked the government to clear the confusion prevailing on the issue of minimum wages under code of wages for the garment industry. The council has asked the government to clarify that the minimum wages are not going to be fixed at Rs. 18,000 per month.
In a letter written to the Textile Ministry, AEPC Chairman, Ashok G Rajani has stated that a lot of confusion has arose over the issue of minimum wages after the clearance of the Wage Code Bill cleared by the Cabinet. This has impacted the booking of export orders and to restore the confidence of foreign buyers, it is important that a suitable clarification is issued by the government.
Talking about the issue, Ashok G Rajani, Chairman Apparel Export Promotion Council said, “The cost of wages in the garment export sector is around 30 per cent of FOB which is the highest by any standard. Apparel industry is already passing through a challenging phase due to slow down of world economy. In the present stressful and challenging times, any additional burden on account of doubling the minimum wages from the present about Rs. 9,000/-pm to Rs.18,000/- will make garment manufacturing unviable and unsustainable in future. Today around 70 per cent of the workforce in readymade garment Industry are women while other Industries have the participation of women in its workforce between 3 per cent and 7 per cent. Hence fixing of minimum wages at Rs. 18,000 per month will not only adversely affect the exports but will also lead to a fall in the employment generation in the sector.
The minimum wages per month prevailing in some of the states, where readymade garment exports are concentrated clearly state that in case the minimum wages are raised to Rs.18000/- per month, the percentage raise will be as high as 246.15 per cent from the current minimum wages.
The garment exports during the month of July’2017 have registered a negative growth of 11.86 per cent in dollar terms as against July, 2016 and the growth trajectory of 31.72 per cent achieved during the month of April’2017 has now been limited to 5.94 per cent in the period April-July, 2017, with garment exports touching only $6183.35 mn.