NEW DELHI: India's garment exports are expected to register a 15-18 per cent growth to touch USD 20 billion during the current fiscal following improved market conditions in US and other markets.
"We have clocked 15 per cent growth in garment exports at USD 17 billion in FY17. We expect 15-18 per cent in current fiscal to register exports of USD 20 billion.
"The US market, which consists of 30 per cent market share is doing reasonably well and we are also looking at good exports potential to South America, European, Middle East and Japanese markets this year," Clothing Manufacturers Association of India (CMAI) President Rahul Mehta said recently.
Due to the world recession and heavy competition from China, Bangladesh and Vietnam, India could not fulfill the export target for the year 2016-17.
However, there has been a growth in export to the tune of 13 per cent in dollar terms, in the last 5-6 months. This has been mainly due to the favourable special apparel package announced in July 2016.
"We are strong player in spring and summer wear, but we need to increase exports of autumn and winter wear, which we hope to do in coming years," he said.
Mehta said demonetisation last year had not hit the industry and proposed GST (Goods and Services Tax) rates implementation is also unlikely to impact the industry adversely.
Whilst welcoming the GST, Mehta said there could be some confusion and uncertainty for initial 2-3 months for manufacturers and dealers. However, in the long run, it will be beneficial to the garment industry.
The Government has accepted most of the recommendations made by CMAI, and keeping a majority of the industry under the 5 per cent GST slab, he said.
Although, there is some concern among fabric manufacturers for the 5 per cent duty. The government has also accepted CMAI's request to reduce the GST applicable on job work from 18 per cent to 5 per cent, but unfortunately this has been done only up to the fabric stage, Mehta said.
Job working in garmenting still attracts 18 per cent GST. This will be a major blow to the small manufacturer, most of whom follow the job work basis of manufacturing. CMAI has requested the Government to reconsider this obvious anomaly and reduce GST on job working at the garment stage to 5 per cent.
To showcase the business opportunity, CMAI is organising 65th national garment fair, the largest apparel trade show in Mumbai from July 10-12.