Editorials

by Rajen Kumar

APEDA Rendering Lip Service

For over four years now, we have been making relentless efforts to fill information deficit that painfully exists in the country's Micro, Small and Medium Sector. Encouragingly enough,...

Special Reports

Jan 2012

Be Skeptical. Be very Skeptical. Mistake upon Mistake

In recent months, we've had a few slip-ups by the official statistical system in India: • Yesterday's IIP release was preceded by a mistake. Mint says: On Monday, the...

Top Stories

Hit by Adversities Garment Exporters Face Rough Weather

Gurdeep Singh
Aug 2010

The Garment exporting sector, unable to steer its ship in rough global weather, seeks a bailout package from the government to include special norms for labour employment, higher DEPB rate and broadening the scope of the scheme as well as tax sops.

"It has become extremely difficult to steer our ship. A package alone can help the ship of garment exporters from sinking," Garment Export Association (GEA) Secretary General Surinder Anand said and added,

According to him, while the exporting industries have been affected by the uncertain global outlook, the appreciating rupee and rising input costs at home, the sector is faced with stiffer than ever before competition from its competitors, like Pakistan, Bangladesh, China, Sri Lanka, Turkey and Thailand to name but a few.

Anand said many of these competitors are being helped by their governments to prevent their boat from rocking as well as historical advantages they have of lower labour costs, cheaper inputs, better machines and higher productivity. Anand lamented that the government has not been as forthright as it should have been in assisting the garment exporting units to have smooth sailing even in most difficult times. “Forsaken, its back can be broken”, he said.

GEA President Rakesh Vaid said the textile and garment sector, which provides some 35 million jobs, accounts for 14 per cent of country's industrial output and about 17 per cent of export earnings, plays a significant role in the economic development of the country.

Unlimited Opportunities

He said it is the highest employment generating industry which offers unlimited opportunities to women for employment. The garment export industry is one of the most dynamic sectors of the Indian economy. It has made significant progress over the years not only in respect of its contributions to industrial production, exports and generation of employment but also in achieving a high degree of sophistication, quality up-gradation, cost reduction and standardisation capable of withstanding stiff international competition.

However, post-quota growth in apparel exports so far has remained below potential.

Vaid said the increasing input cost, tight credit policy and high interest rates, severe liquidity crunch, rigid and outdated labour laws, poor infrastructure and high transaction cost, high power costs and frequent power cuts as well as increasing cost of wages are some of the difficulties being faced by exporters which should be mitigated to the extent possible and a long term solution should be finalised for the efficient functioning of exporters.

“Global meltdown has increased international competition and reduced the demand of garments due to slowdown in the world economy, including formidable problems being faced by the United States, the European Union and Japan, which account for almost 80 per cent of India's exports,” Vaid said.

Losing Strength

Vaid opined that the recent steep hikes in fabric prices have also affected the competitive strength and performance of the Indian apparel industry. “Although there are signs of improvement, but the global economic outlook still remains difficult and thus the performance of Indian economy will be affected by the lingering problems that the international community is facing.”

Vaid said labour-intensive garment export sector needs special consideration as it adds maximum value to the exported products, using more than 95 per cent of indigenous materials. According to him, as the international apparel market has become highly competitive the government must reduce transaction costs and grant necessary fiscal and commercial relief to the garment exporters to enable them to face the heightened international competitiveness.

To read full article please subscribe SME WORLD

0 Comments >>

Our Achievements

Winner of appreciation award for promoting SMEs in India.
1st ever Indian magazine to penetrate tier II, III cities & the rural belt.
Industry Partnerships include CII, FICCI, ASSOCHAM, PHDCC, AIMA, ITPO, SME Network, Federation of Indian Micro Small Enterprises (FISME)
Official Magazine Partners for several national & international MSME events.

The Last Word

Down the Memory Lane

Zainul Abdin was the only person who would pour his heart out to me in a mix of Urdu-Hindi (Hindustani ) in hush-hush tones during the war-torn Dhaka (then Dacca) in the early 70s where I worked...

You can also write for SME WORLD

We are looking for writers and experts to contribute original stories and articles. Send an email to smeworld@gmail.com with your story idea and lets get talking.

Some of our valued contributors are...