Apparel export industry should be treated at par with MSME sector: AEPC

Reeling under the impact of COVID-19 pandemic, apparel exporters on Monday urged the government to treat the labour-intensive sector at par with MSMEs.

In a letter to Prime Minister Narendra Modi,Apparel Export Promotion Council of India (AEPC) Chairman A Sakthivel said the sector is facing huge losses due to nonpayment of export bills and cancellation of orders.

We would request that the apparel exporting industry may be treated at par with the MSME sector as we work on wafer-thin margins of 4-5 per cent," Sakthivel said.

Domestic exporters have a huge pile-up of inventories because of lockdown in several countries, he said adding the industry is one of the largest employers of the country employing 12.9 million people directly.

He also said the benefits related with Employees' Provident Fund (EPF) should be extended to the sector, irrespective of the number of workers employed and more specifically to cover all the apparel exporting units, since they are highly labour intensive with a huge women workforce.

"A large number of our exporters lost huge money by booking forward contracts and we feel that the loss can be converted into a working capital-term loan with repayment in three years with a 6 per cent interest rate," he added.

Sakthivel further suggested that the facility of granting additional working capital to all MSMEs without collateral may also be granted to all apparel exporting industries irrespective of their size.

"The benefit of interest equalisation scheme extended earlier this week by one year may kindly be extended by at least two years and the benefit of 5 per cent may kindly be extended to all units at par with the MSME sector," he said.

Further, he said that to encourage AEPC members to export manmade fibre garments, the government should consider sanctioning 6 per cent of the COVID-19 fund as it would help in significantly increasing outbound shipments.

Citing a study, he said China, Cambodia, Vietnam and Indonesia are exporting 80 per cent manmade fibre garments globally, whereas India exports 90 per cent cotton garments only.

He added that permitting exports of all types of non-medical and non-surgical masks will boost the production and exports of masks.

There is a huge opportunity for export of such masks. There is a huge demand for the export of these products and AEPC has already identified the international markets for these masks. The council assures the government that it will ensure exports of these items to the tune of USD 1 billion within the next three months, Sakthivel said.