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Apparel Industry striving to meet the RMG export target despite challenges: Chairman AEPC

New Delhi/ Gurugram, 14th December 2022:  After a successful run for many quarters merchandise exports contracted by a massive 16.7 percent to USD29.8 billion in October– the first contraction in 19 months. The RMG exports also declined, speaking on the RMG export scenario Chairman AEPC, Mr Naren Goenka said, “Since most of the traditional markets of Indian RMG including UK, EU and the USA are witnessing recession and global headwinds, leading to shrinking of demand on one side and buyers asking for 15% discount on the other, we have requested government for expediting FTAs in these markets and ensure all tariff lines of RMG sector, which will enable a duty reduction of existing 9.6% and act as a strong breather.”

The impact of global slowdown on trade is beginning to show on credit demand from Indian exporters, with export credit by banks shrinking nearly a quarter year-on-year at the end of October by 25%, signaling further downsizing in overseas merchandise exports. The Index of Industrial 

Production (IIP) for October 2022 also indicates that the manufacture of textiles, clothing and related products recorded a double digit hit, which shows the sluggish demand and pressure on the textiles value chain, Chairman AEPC added.

Indian RMG exports were to the tune of US$ 9161.4 million during April-October 2022-23 as against US$ 8589.3 mn during the same period in 2021-22 depicting the growth of 6.7%. Comparative analysis of this figure with past years, our exports this year have seen a growth of 53.4% over the same period in 2020-21 and 1.9% over 2019-20.

Further Chairman AEPC informed, “The total set target of apparel exports for 2022-23 is US$ 17.6 billion against which we have been able to achieve US$ 9.2 billion during April – October 2022. This is despite various constraints faced by the apparel sector this year, such as increased prices of raw material, Russia-Ukraine war and sluggish demand in major garment importing countries.  In spite of all the constraints, we shall achieve the level of exports of last year and may exceed this year as well.”

Highlighting the demand of the industry, Chairman AEPC, Mr Goenka stated, “We have briefed the government about the RMG exports scenario and our issues we are facing currently. The major issues submitted by AEPC are: Early announcement of the PLI – 2.0 Scheme, including 10 high potential MMF garment products and cotton apparel products under the Production Linked Incentive Scheme (PLI) and reducing the value addition criteria, Extension of ATUFS, RoSCTL disbursements through bank transfer, Relaxations to apparel exporters under various provisions of FTP allowing Special Advance Authorization for exports of Apparels under Self-Declaration basis, One Time relaxation on account of bankruptcy / insolvency / discounting / cancellation of export orders, Raw material security, RoSCTL benefits for Apparel exports against Indian Rupees, Enhance the ambit of Interest Equalization scheme, Request for extension of GST exemption on International Outbound Freight, etc.”

AEPC is sincerely grateful to the Government of India for providing continuous support to the Apparel export sector. Government has been providing proactive support to the apparel sector by taking various measures like continuation of Rebate of State and Central Taxes and Levies (RoSCTL) scheme, Production Linked Incentive (PLI) scheme, PM Mega Integrated Textile Region and Apparel (PM MITRA) scheme etc. These schemes are helpful in creation of additional capacity, Chairman AEPC added.  

The Apparel Export Promotion Council (AEPC), is a body of apparel exporters having direct membership of over 7000 apparel manufacturers/exporters. The exports from the apparel sector were US$16.01 billion in the year 2021-22. The apparel sector provides direct employment to approximately 14.5 million people and out of this 70% are women workers and migrant labourers. This sector has predominantly MSME units which is more than 70%.

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Table-1: India’s RMG Exports to World
Year2019-202020-212021-222022-23
(up to October)
in USD Mn.15509.512289.716019.99161.4
Source: DGCI&S; PIB
Table-2: India’s RMG Exports Growth in %
Year2019-20
over
2018-19
2020-21
over
2019-20
2021-22
over
2020-21
2022-23
over
2021-22
(April-October only)
in USD Mn.-4.0-20.830.46.7