Participating in exhibitions is always a learning experience and being at Gartex 2017 was really an exciting experience after a long time. Though these are tough times for the industry, still they all came in large numbers to the fair with the hope for finding something new and different.
I met many owners, CEOs and senior management from export houses from across the country. Gartex 2017 saw participation of companies like Orient Craft, Eastman Export, Blackberry, KK Overseas ( Jaipur) and companies from as far as Kolkata, Dehradun and Mohali. This was inspiring considering the fact that the market for both the segments is not at its best. The exporters and domestic manufacturers are all struggling to come to terms with the effect of demonetisation and GST. Both these policies have reduced money flow in the market and increased the need for working capital, affecting business at various other levels too.
Through candid interactions with all these companies, I found that though no one was really complaining that the policies are bad or not good for the country/industry, the main grouse was that many grey areas still exist and there is no clarity on many critical areas – mostly related to 18% GST on job work in the apparel segment. While those exporters who have all value adding capabilities in-house will be at an advantage, the middle level and smaller exporters who are dependent on contractual job workers for their value-added processes will have to bear the increased cost...
The other concern being reduction in duty drawback..., most exporters have come forward to discuss how the drawback was their only saviour amongst the several impediments and had helped to keep their balance sheet in black. But now with the reduction in the duty drawback to 3 to 4%, even this last expectation is gone.
With Surat being practically closed from the beginning of July and growing fear of another round of strikes, the supply chain has been hit badly. Deadlines are going for a toss and hectic lobbying is going on to break the deadlock.
For domestic manufacturers, since many markets are closed, demand is slow since June. And it is no secret that both the US and EU are facing difficult times…, yet the positive part is that the industry is keen to explore new technologies which will help them to become more competitive on value, and the quality visitation at Gartex is proof of the same! Deepak Mohindra Editor-in-Chief