'Smaller Garment Units Need Govt Attention'

Business Standard: What is the exact position of the Indian readymade garments exports as of today?

Madan Jain: Garment export is the largest net foreign exchange earner of our country today. Amongst India's total exports, textiles contribute over 36 per cent in foreign exchange earnings.

Out of this, more than 16 per cent is from the readymade garment industry. During 1996-97, readymade garments worth $4.762 billion (Rs 16,729 crore) were exported from India. Garment exports during 1995-96 were Rs 14,806 crore as against Rs 13,937 crore during 1994-95. The growth rate during the last two years was 6.23 and 12.99 per cent respectively which is quite insignificant as compared to the earlier years when the growth rates were 20 to 30 per cent per annum.

 

BS: Indian readymade garment exports have a very negligible share in the world market. How can this be increased?

M Jain: It is true that despite the sterling performance by the readymade garments sector, the share of India's garment exports in the global market is a mere 2.5 per cent only.

This can certainly be increased provided we have a strong fabric base, which is one of the main raw materials for the production of garments. As of today, mills contribute just 7 per cent of total fabric produced in our country. Next comes the handloom sector which contributes 21 per cent and the remaining 72 per cent comprises the unorganised powerloom sector. Unless the government gives proper impetus for modernisation of textile manufacturing facilities we can't think of producing fabrics of international class. We can increase our share and also become competitive in the global market only with a strong fabric base supplied by quality conscious manufacturers. The priority should be modernisation of textile manufacturing units so that high class fabrics can be manufactured at a competitive price. The government should also provide the necessary facilities for such units to attain the required global levels.

BS: Please comment on the government's policy for the readymade garments industry?

M Jain: Our industry basically falls under the small-scale sector. Over the years, it has been observed that the small-scale sector has been neglected by the government.

Besides, raising the limits for export house status from Rs 10 crore to Rs 20 crore is also disturbing in view of the fact that small, medium and cottage sector exporters are not in a position to reach the limit of even Rs 10 crore. Also, it is an injustice, that at present, the market development assistance (MDA) is given only to export houses, trading houses, star trading houses and super star trading houses. This is despite the recommendations of the parliamentary committee on commerce and textiles chaired by Manmohan Singh, former finance minister that MDA should also be made available to all those small exporters who contribute to the country's exports.

Modernisation of garment manufacturing factories is another priority area. The industry needs serious encouragement from the government to motivate factory owners to set up sophisticated modern manufacturing facilities which are totally missing now.

The garment industry is reserved for the small-scale sector and the benefit of zero duty under the capital goods scheme (EPCG) should be made available for imports of sewing machineries worth Rs 1 crore instead of the present limit of Rs 20 crore as none of the garment exporters can reach the investment of Rs 20 crore.

The small-scale sector has not received the required attention in the 5-year plan policy announced by the government on April 1, 1997 for the period 1997-2002. The new exim policy lacks foresight and seems to be looking at the problems and prospects of the trade from a bureaucratic angle.

The exim policy has clearly failed to come out with any innovative scheme to provide extra stimulus to garment exporters. Small exporters who have no import input and export only value-added products are ignored by the government and not given any benefits. A radical change in the government's attitude towards the readymade garments industry is the need of the day.

BS: What are the problems faced by the readymade garment industry and how can they be solved?

M Jain: Manufacturing of readymade garments is a highly labour intensive activity with low capital investment and is free from pollution of either air, water or noise. This industry has tremendous potential of generating employment opportunities and employs hands which are skilled, semi-skilled and unskilled and also provides ample opportunities to men and women both educated and uneducated to earn a decent livelihood.

Any woman with even a little knowledge of stitching can easily get a job and earn bread and butter for her family. Some of the problems faced by the industry are concerning infrastructure, power supply and cumbersome labour laws.

* Infrastructure: It is very important that all state governments make separate