Textiles, garment industry yet to shrug off GST blues

2018 may turn out to be a challenging year for India's textile and garment industry, with exporters still reeling under the impact of GST and outward shipments likely to miss the $45 billion target for 2017-18.

Garment exporters have been demanding that the duty reimbursement to them be retained at the pre-GST (Goods and Services Tax) drawback rate of 7.5 per cent, amid declining outbound shipments.

India's apparel exports declined 39 per cent in value terms in October.

However, India's cotton production could touch 37.7 million bales in the year that began on October 1, up from 34.5 million bales produced in 2016/17.

The production of import substitute bivoltine silk in the country is expected to reach around 6,200 million tonnes (MT) in 2017-18 as compared to 5,266 MT a year ago, registering an increase of 19 per cent, according to the Textile Ministry.

Meanwhile, 2017 turned out to be a mixed bag for the textiles sector. While initiatives were unveiled for power loom units and weavers, the much-awaited new National Textiles Policy is yet to see the light of the day.

Towards the end of the year, a scheme for capacity building in textile sector to boost skill development and job creation was launched with an outlay of Rs 1,300 crore. 10 lakh people are expected to be skilled and certified in various segments of Textile Sector through the scheme, out of which 1 lakh will be in traditional sectors.

The year also witnessed the first mega international trade event for the textile sector, which was inaugurated by Prime Minister Narendra Modi in Gandhinagar, Gujarat, on 30 June.

The event recorded participation from more than 100 countries and a total of 65 MoUs with an estimated value of over Rs 11,000 crore were signed during the exhibition.

India Handmade Bazaar, an online portal to provide direct market access facility to artisans and weavers, was launched in January.

In November, the Textiles Ministry notified post-GST rates under the scheme for Remission of State Levies (RoSL) on exports of readymade garments & made-ups. For garments, the rates range between 1.25 per cent and 1.70 per cent and for Made-ups, they range between 1.40 per cent and 2.20 per cent, with the rates effective from October.

The government also enhanced the rates under Merchandise Exports from India Scheme (MEIS) on readymade garments and made-ups from 2 per cent to 4 per cent. The rates will ve applicable between November 1, 2017 and June 30, 2018.

A comprehensive national policy covering all segments of the textiles sector is the need of the hour, to give a push to exports from the sector, which have remained stagnant for the past four fiscal years, mainly because of less demand in major markets such as the US, EU and China, and stiff competition from countries like Vietnam and Bangladesh which enjoy an edge over India.