Domestic apparel industry is set to revive in the ensuing winter season due to overall improvement in buying sentiment following favourable monsoon rainfalls this season.
After over six months of subdued trend between October and April, buying sentiment improved in domestic apparel sales in May and continuing since then. With initial showers remaining good, the domestic apparel sector may see a turnaround in coming months.
"The first half of 2014-15 showed a sharp slowdown in apparel sales started in October 2014 and continued till April. But, the sentiment was seen reviving in May which is likely to continue during the rainy season. The industry will see a sharp pick up this festive season," said Rahul Mehta, President, The Clothing Manufacturers' Association of India (CMAI) while announcing 61th National Garment Fair scheduled to be held here between June 29 and July 1.
During the calendar year 2014, apparel sales recorded a growth of 12 per cent after 7-8 per cent jump witnessed in 2013.
Apparel exports too have recorded 10 per cent growth to $16.85 billion during the financial year 2014-15. Between April-May period, apparel exports have jumped a negligible 5 per cent. The government has set a target of $18 billion apparel exports for 2015-16. With rising cost of production China; and also Bangladesh started being gradually uncompetitive in the western world, India's growth in apparel exports looks achievable.
"While we have witnessed a growth in 2014-15 in apparel exports, we are yet to exploit the opportunity to our full extent for which the government needs to provide right circumstances. Indian apparel sector can easily double its exports in the next five years if government provides extensive support," said Premal Udani, Managing Director, Kaytee Corporation, an apparel exporter.
Explaining the need, Udani said, the government must refund all taxes and levied paid to them. Currently, state levies and corporation taxes are non refundable while central levies like customs and excise are refunded. So, textile industry had to forego 3-4 per cent of duties in all. Apart from that, working capital loan available in competing countries at 4-5 per cent as against 10-12 per cent in India.
"Also, a free trade agreement (FTA) with the European Union has become the need of the hour which would make Indian apparel competitive in European countries. An FTA with the European Union will certainly give impetus to apparel sector," Udani added.
Despite sluggish market trend, CMAI's textile fair is set to become the largest in India with participation of 780 brands this year as against 680 brands last year.
Meanwhile, the government appointed CMAI last year to set up 50 apparel training centres of which it has already established 35 and trained 12,000 workforce so far of which 90 per cent absorbed by the industry.