Apparel exports on course to hit $11 billion

Coimbatore: With apparel shipments hitting the $1-billion a month mark in December for the first time in nine months, garment makers are confident of achieving $11 billion in exports during the current financial year. That would 6% higher than the previous year.

"We are seeing signs of revival. The industry is poised for growth. China is having a lot of problems and wants to exit the mid and low-priced segments. So, buyers are taking a fresh look at India," said Premal Udani, chairman, Apparel Export Promotion Council (AEPC). Exports had shown growth only in four months during 2010 and declined 3.1% in April-December.

India is one of the few countries having capabilities across the textile value chain and "all these factors are working considerably in our favour now". China has a lion's share of the global textile trade with exports worth about $110 billion and even a 5% shift in favour of India would throw up huge opportunities, the AEPC chairman said.

Apparel would be one of the biggest beneficiaries of the free trade pact between India and Japan, he said. With the pact in place, India would be able to export garments at zero duty to Japan. Garment makers pay around 11% in duties now.

Exports to Japan is estimated to touch $125 million in the current fiscal and this could easily go up by another $50 million in the next fiscal, Udani said. Japan could easily become the third biggest importer of garments from India, he said. Growth in the domestic market has also risen sharply. The emergence of the domestic market, which is growing at double digit rates, has changed the situation for the better, he said.

Despite the revival, the industry is still facing challenges that include high cotton and yarn prices, low productivity and high taxes, Udani said. "If these issues are addressed we can grow by 30%."

Apparel industry keen on tapping NREGS

M Allirajan | tnn

AEPC is keen on tapping the National Rural Employment Guarantee Scheme. "We have written to the planning commission and the proposal is also with the textiles ministry," AEPC chairman Premal Udani said. Training in apparel making could be made part of NREGS for which the industry could contribute Rs 50 per worker per day, initially.

Once the worker is employed the industry would give an amount equivalent to the government's contribution to the scheme, he said. The government can take a base year for ascertaining the regular workforce in the apparel segment and for incremental jobs created by the industry NREGS funds can be provided, AEPC suggested. Though the industry is not facing labour shortage now, it would face problems once the domestic and export markets start growing at a faster pace, Udani said.