India's apparel exports to set new record at $20 billion in FY17-18

Shipment contributes around 30% of India's overall apparel exports

Apparel exports are set to reach $20 billion in 2017-18, 13 per cent higher than a year ago, on policy support from the government.

Apparel exports moved in a narrow range since 2013-14 when the government introduced a revised technology upgradation funds scheme that attracted fresh investment and reduced the cost of production. Apparel exports moved up to $17.5 billion in 2016-17 from $16.8 billion in 2014-15.

In the past six months, exporters have seen a sharp increase in orders from the US, the EU and the West Asia. “We expect the momentum to continue. Apparel exports could set a new record of $20 billion this year,” said Rahul Mehta, president of the Clothing Manufacturers’ Association of India.

The government announced a Rs 6,000-crore textile package last year which the industry started taking advantage of in November and December.  Duty exemptions like the refund of state levies also helped Indian apparel manufacturers compete with global players. 

“We hope the industry is able to convince the government to continue duty drawbacks for at least one year after the goods and services tax (GST) is introduced,” said Premal Udani, managing director, Kaytee Corporation, an exporter of children’s garments. Apparel exporters enjoy nine per cent duty drawbacks in the form of customs, excise and service tax. 

The industry urged the government to reduce the GST rate on job work from 18 per cent to 5 per cent.

Mehta said the GST would make fabric imports cheaper from China. The GST is set to make garments priced less than Rs 1,000 cheaper by 2-2.5 per cent. Those priced higher will become 2.5-3 per cent costlier.