Apparel exports have declined by 14 per cent in rupee and 8 per cent in dollar terms in January this year compared with the year-earlier month, latest data showed. Exporters cutting back on orders because of funds crunch and the delay in refund of levies hurting industry, say sources.
Between April and January of last financial year, apparel exports stood at Rs 93,745 crore and for the same period this fiscal, it was Rs 88,709 crore, a drop of 5 per cent. “We were hoping to remain at $17 billion of total apparel exports this year,†said a spokesperson of Apparel Export Promotion Council (AEPC).
“But, I do not see the sentiments for any major correction. Usually, orders are good between January and March. However, this year, exporters are cutting back on orders because of financial crunch,†said the spokesperson.
If a garment unit with Rs 10 crore turnover has Rs 1 crore locked up in pending refund arrears, it is a problem for exporters. Almost 80 per cent of the benefit in the apparel package announced by the Centre in 2016 is towards ROSL. Almost 55 per cent of garment exporters had not received the RoSL (Rebate of State Levies) since last July and this amounted to almost Rs 2,000 crore, the AEPC spokesperson added.
While the country’s exports are growing, decline in apparel and textile exports will bring down the share of the sector in the export basket.