Apparel SEZ units in Gujarat lose out on exports

Unlike their counterparts in other parts of the country like Gurgaon or Tirupur, apparel units in special economic zones (SEZs) in Gujarat are still reeling under slowdown woes. While several of them have stopped production, others are incurring losses due to dwindling export orders.

The problems faced by the apparel SEZs in Gujarat could be gauged from the fact that Gujarat Industrial Infrastructure Development Corporation (GIIDC) had sought permission of Board of Approval for SEZ, government of India, to change of sector status from Apparel to textiles and articles of textiles.

GIIDC contended that the SEZ was disadvantageously placed as compared to the domestic tariff area (DTA) units.

The Gujarat government agency also informed that the BoA that the SEZ could not be denotified till all the units exit. However, BoA did not allow GIIDC to change sector status. Similarly, all but one units at the Surat Apparel Park SEZ have also asked BoA for denotification of the status.

"The rule that all units should agree for denotification has left us in a lurch. Since one unit at the SEZ has not agreed for denotification, some of us have been forced to suspend our operations while others are bearing huge losses. If the SEZ status is denotified and changed into an apparel park, we could avail benefits of the DTA like duty drawback on exports which has skewed the level playing ground between SEZ and DTA units," said Ajoy Bhattacharya, chairman, Surat Apparel Park Association.

According to sources in the state government, the units also intend to make the most of Gujarat's initiative to develop the apparel sector in the region.

"It is yet to be seen whether the Centre denotifies these SEZs. However, the state government is focused on developing the apparel and spinning sector in Gujarat and several existing and new units intend to be part of it," sources said.

On its part, Gujarat is inviting investments in both spinning as well as apparel sectors which have been the weaker links in the textile value chain of the state.