Gurgaon: “The Planning Commission has called a meeting of apparel exporters on 5 February, to consider measures for stimulating garment exports, since packages announced earlier by-passed the employment generating sector,” Minister of State for Commerce Jairam Ramesh said.
The Apparel Export Promotion Council (AEPC) wants increase in the drawback rates, tax holiday on export income and interest-free loan for machinery.
“I think these are demands which are legitimate and should be considered by the government seriously,” Ramesh said after visiting the India International Garment Fair here.
Exporters, including those in garment trade, have complained that the two stimulus packages unveiled in December and earlier this month did not provide any relief to the sector reeling under the impact of recession in the US and slowdown in several other countries.
“I spoke to Montek Singh Ahluwalia (Planning Commission Deputy Chairman) twice. He is sympathetic, stimulus packages have by-passed the apparel industry,” Ramesh said.
The minister said that no help was given to the labour-intensive garment sector, while the reality firms have been given sops twice. “I don’t see any reason why the real estate sector should get two stimulus packages and the apparel industry has not got one,” he said.
He said that the textile industry, which provides one-third of the industrial employment in India, deserves a special package because of its importance from the point of view of employment and exports.
Over five lakh people have also lost jobs in the sector in the last few months, AEPC has said.
“Duty drawback is the single most important intervention that can be done by the government,” he said.
Garment exporters are demanding 14% duty drawback, from the present 8%.
India’s apparel exports have been declining since August, 2008. The shipments in November, 2008, were $621 million, declining by 11.29% over the same month last fiscal.
AEPC feels that exports in the current fiscal would be below $9 billion, declining by about 9.4% over 2007-08.
With India losing market share to countries like Vietnam and Bangladesh, the target of $25 billion would not be met, it said.