India's garment export is expected to rise to USD 20 billion during the current fiscal, helped by the new initiatives announced by the government for the sector, an industry official said today.
The Union Cabinet last week approved a Rs 6,000 crore package for textiles and apparel sector with an aim to create one crore new jobs in three years and attract investments of USD 11 billion with an eye on USD 30 billion in exports.
"India's garment exports, estimated at USD 16.80 billion now, is expected to reach USD 20 billion during the current fiscal. The special package announced by the government will not only help in attracting large investments but also enhance production capacity," Clothing Manufacturers Association of India (CMAI) president Rahul Mehta told reporters here.
The inclusion of state-level taxes in the computation of duty drawback will provide a major relief to the exporting segment, Mehta said.
However, the prevailing downturn in the global economy continues to adversely impact India's garment industry. During the first quarter ended June 2016, the industry may see a five per cent decline in exports. Total exports of apparel from India stood at around USD 4 billion in April-June 2015.
The domestic garment industry also faces dull market conditions and may see flat growth or a two per cent decline in consumption in the quarter ended June, 2016, Mehta said.
CMAI is organising a mega trade show - 'The National Garment Fair' - on July 13-15 in Mumbai. The event will see participation from 812 brands and nearly 40,000 retailers from across the country are expected to visit the three-day B2B fair, Mehta said.
Commenting on Britain's exit from EU, Mehta said there may not be an immediate fallout of the referendum on the business front, but there could be a period of uncertainty and confusion for some time.
He said there may not be any dramatic impact on India's garment exports to the UK or EU. However, a lot would depend on the exact agreements and treaties to be worked out by both sides, especially on tax implication on movement of goods between the two geographies.
Mehta demanded aggressive follow-up for Free Trade Agreement (FTA) with EU and other countries. Post-Brexit, he felt, there could be a further delay in the signing of the FTA with EU.
The apparel industry also sees huge export potential in Iran, which has a USD 16-billion market and nearly 60 per cent of the demand is met through imports, he added.