India’s apparel production has shown a decline of 10.4 per cent, for the period Apr- Jan 2017-18 due to the consistent decline since May 2017, as per the latest IIP figures released recently. AEPC has indicated earlier about the gradual decline in the production on account of the issues which have arose after the implementation of GST.
As per the IIP figures, there has been a month to month decline in apparel productivity. From a positive growth 1.3 per cent in April, 2017, May saw a fall of 5 per cent. In June the decline was 3.2 per cent while in July, it was 5.1 per cent. August, September, October, November and December recorded 6.4 per cent, 7.2 per cent, 11 per cent, 13.1 per cent and 13.5 per cent dip respectively.
Talking about the decline in exports, HKL Magu, Chairman, Apparel Export Promotion Council (AEPC) said, “For the period Apr- Jan 2017-18, there has been a drastic decline of 10.4 per cent, in the apparel production. This has come at a time when exports are already registering a decline. Exports are falling since onwards with January seeing a decline of a 14 per cent. The industry is suffering as their funds are blocked and they are unable to pay suppliers on time. Suppliers don’t give advance, since they can’t carry them forward for an indefinite period. This has resulted in the decline in apparel production. The biggest deterrent to the industry’s sentiments has been the severe capital blockage due to the dual constraint of delays in RoSL disbursements and IGST refunds. Until the refunds start flowing, things will not improve. The dip in production will not allow us to meet our export target of $20 bn.”
AEPC has been engaging with the policy makers for an early resolution of the issues which is hampering the apparel industry, post GST roll out and has made several presentations to the Ministry of Textile, Ministry of Commerce Drawback Committee, NITI Aaayog, Parliamentary Standing Committee etc. In its last meeting with Hon’ble Minister of State for MSME(IC) Giriraj Singh, an AEPC delegation led by its Chairman, HKL Magu informed the Hon. Minister that if the capital blockage continues and the cost competitiveness of the industry is not restored, the slippage in exports will continue, with long term adverse impact on India’s positioning in this sector.
Prior to that AEPC made a request to the Ministry of Commerce and Industry to urgently release the total ITC Credit and IGST of Rs. 4,097 cr which is blocked till date. AEPC has also informed the Ministry of Commerce that on account of new taxes there is a shortfall of around 5 per cent under GST and therefore several blocked and embedded taxes may be refunded through higher drawback and RoSL rates, along with refund of GST input tax credit(ITC). AEPC has requested for a resolution of the issues of the Industry, so that it can regain the lost opportunities in becoming a world leader in apparel exports.
