ed­i­to­rial

Perfect Sourcing - - Inside - Deepti Mar­wah ed­i­tor PERFECTSOURCING OM sai ram email: ed­i­tor@perfectsourcing.net

the af­ter ef­fects of gst, the im­ple­men­ta­tion of which caused busi­ness to slow down in the last two months, are be­gin­ning to show. ex­port houses, fab­ric man­u­fac­tur­ing com­pa­nies, job work­ers, ac­ces­sory and ma­chine sup­pli­ers- all were busy in chang­ing and un­der­stand­ing the sys­tems im­ple­mented.

Or­ders were stuck and pur­chase or­ders re­mained on hold; con­fu­sion en­gulfed the minds of all in­dus­try play­ers as they strove to find the best way out of this prob­lem. The tran­si­tion phase is def­i­nitely chal­leng­ing, although every­one is hop­ing for a bright fu­ture and an ef­fi­ciently or­gan­ised mode of busi­ness. in this is­sue, we have an­a­lysed ex­ports to the u.s. in 2017 June as com­pared to last year which shows in­dia com­ing af­ter in­done­sia with a 4.52% share in the u.s. mar­ket with ex­ports worth usd 1999.75mn till June 2017. in­dia’s vol­ume of ex­ports to the u.s. saw a de­cline of around 8.61%. in fact, ex­cept for in­done­sia and Viet­nam, all coun­tries saw a drop in ex­port vol­ume to the u.s. this in­di­cates a shift in the sourc­ing pat­tern of the u.s., which is ac­tu­ally mov­ing to­wards coun­tries with Ftas, bet­ter ac­ces­si­bil­ity and prices. the trump ef­fect is also ev­i­dent as the u.s. could well be re­duc­ing its de­pen­dence on China for sourc­ing. in our face2­face sec­tion, we met with ir ac­ces­sories, a com­pany that, af­ter carv­ing a niche in ac­ces­sories like scarves, has got into man­u­fac­tur­ing of gar­ments and has set up a large unit for dig­i­tal print­ing.

You will also read about the im­pact of gst on in­dia’s big­gest cen­tre for man­u­fac­tur­ing man-made fab­rics, surat. the hub has been fac­ing sev­eral prob­lems due to gst. traders fear that gst, with its em­pha­sis on for­mal­is­ing busi­ness by mak­ing them reg­is­ter for a gst num­ber–thereby in­tro­duc­ing trans­parency and widen­ing the tax net– will lead to busi­ness go­ing to larger and bet­ter or­gan­ised traders. an in­ter­est­ing turn up for the in­dus­try was seen when the gst coun­cil an­nounced the re­duc­tion of gst on cot­ton-based fab­ric to 5% from the ini­tially pro­posed 18%. gar­ment man­u­fac­tur­ers have wel­comed the gov­ern­ment’s de­ci­sion to cut ser­vice tax (goods and ser­vices or gst levy) on third-party ser­vices, com­monly known as job work. this rate of 5% will be ap­pli­ca­ble for job work in ap­parel, shawls and car­pets.

We are yet to see what gst brings in the long run and its im­pact on the growth of the tex­tile in­dus­try. How­ever, at the mo­ment, things are tough and it is dif­fi­cult to say when mat­ters will set­tle down.

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