Soaring raw material prices hurt Noida’s garment sector

Soaring raw material prices hurt Noida’s garment sector

COVID-19 has severely affected the garment industry, with exports dropping and 20% of people losing their jobs. AEPC has requested the government for an essential service tag that will free them from lockdowns.

Noida, Uttar Pradesh

The increase in
prices of raw materials and packaging items has affected the garment business
in Noida. The sector saw a drop in the exports from Rs 200 billion in 2019-20
to Rs 150 billion in 2020-21. Furthermore, 20% of people employed in the
industry have lost their jobs.

Lalit Thukral, President,
Noida Apparel Export Cluster (NAEC), has stated that the COVID-19 pandemic has
worsened the situation for the readymade sector. Between March and June 2020,
the garment production for the domestic market and exports was halted. Noida’s
garment sector did not gain much business post that, which resulted in the apparel
exports suffering a 25% loss as compared to the previous year. Adding to this
is the sharp increase in the prices of yarn
and cotton.

He added that
the government introduced the Refund of Duties and Taxes in Export Products
(RoDTEP) this year, to replace Refund of State and Centre Taxes and Levies
(RoSCTL). This provides an equal opportunity for exporters affected by the Free
Trade Agreement (FTA). Since RoDTEP doesn’t apply to the apparel sector, there
has been a request raised to factor in the same.

The Apparel
Export Promotion Council (AEPC) has expressed concern about the ongoing COVID-19
second wave in India and the possibility of another lockdown. A Sakhtivel, Chairman,
AEPC, mentioned that they have requested the government for an essential
service tag to exempt the apparel export industry, which is extremely labour
intensive, from a lockdown. He added that lockdowns will cause more disruption
and affect the industry on a long-term basis.

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