India's garment exports clocked 15 percent growth at USD17 billion in FY17 now following improved market conditions in US and other markets, the garment exports are expected to register a 15-18 percent growth to touch USD 20 billion during the current fiscal.
The US market, which consists of 30 percent market share is doing reasonably well and they are also looking at good exports potential to South America, European, Middle East and Japanese markets this year, said Clothing Manufacturers Association of India (CMAI) president Rahul Mehta.
There has been a growth in export to the tune of 13 percent in dollar terms, in the last 5-6 months. This has been mainly due to the favourable special apparel package announced in July 2016.
India is a strong player in spring and summer wear, but they need to increase exports of autumn and winter wear, which they hope to do in coming years., Mehta said.
Mehta said that demonetisation last year had not hit the industry and proposed GST (Goods and Services Tax) rates implementation is also unlikely to impact the industry adversely.
Whilst welcoming the GST, Mehta said that there could be some confusion and uncertainty for initial 2-3 months for manufacturers and dealers. However, in the long run, it will be beneficial to the garment industry.
The government has accepted most of the recommendations made by CMAI, and keeping a majority of the industry under the 5 percent GST slab.
The government has also accepted CMAI's request to reduce the GST applicable on job work from 18 per cent to 5 per cent, but unfortunately this has been done only up to the fabric stage. There remains some concern among fabric manufacturers for the 5 percent duty.
Job working in garmenting still attracts 18 percent GST. This will be a major blow to the small manufacturer, most of whom follow the job work basis of manufacturing. CMAI has requested the government to reconsider this obvious anomaly and reduce GST on job working at the garment stage to 5 percent.
To showcase the business opportunity, CMAI is organising 65th national garment fair, the largest apparel trade show in Mumbai from July 10-12. .
During the last fiscal year 2016-17, India could not fulfill the export target mainly due to the world recession and heavy competition from China, Bangladesh and Vietnam,
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