India: Garment exports from Ludhiana note sharp decline
Garment traders of Ludhiana, Punjab are feeling the pinch of GST (Goods and Services Tax) execution and rate reduction in duty drawback (from 7.7 per cent to 2 per cent) as they note a decline in exports when compared to last year.
Delay in GST refunds has also caused trouble to the apparel exporters as they do not have much working capital in hand. It is being said that exporters are yet to receive the refund even though the shipments have been done.
According to traders, a decline of around 40 per cent has been seen in exports this year. The traders now want the Government to extend the transitional provision for duty drawback and Rebate of State Levies (RoSL) till the beginning of the new fiscal year in support of the industry.
The exporters also demand a surge in duty drawback rates to compete with rival countries like Bangladesh and Vietnam.
Ludhiana is one of the key apparel manufacturing hubs of India and a house to several small and medium-level manufacturers. A drop in sourcing from this destination impacts the overall exports from the country.
Experts are of the view that India’s overall garment exports will note a 15 per cent decline to US $ 14 billion in the fiscal 2017-18 from US $ 17 billion last year. Although the GST Council has reduced rates on the various garment and textile products, the industry is yet to bounce back.
A decline of around 40 per cent has been observed in exports from Ludhiana