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The Ongoing Challenges In The Indian Readymade Garment Exports Segment

Shahram Warsi
Shahram Warsi Sep 17 2018 - 2 min read
The Ongoing Challenges In The Indian Readymade Garment Exports Segment
The Readymade Garment Exports (RMG) experienced a drop in the first three months of current fiscal (April to June), declining by 16.57% to Rs 27,103 crore.

The Readymade Garment Exports (RMG) is continuing its declining journey, reaching 12.12% to $6.61 billion from $7.522 billion from April to August. The downfall is being recorded completely, with no good happening to the RMG industry.

The rising cotton prices, followed by GST and reduction in duty drawbacks have caused the RMG industry to face such challenge. After reporting 8% decline in FY18, the exports of readymade garments are still facing the same situation. The stats have fallen to 22.78%, 16.57%, and 12.45% respectively for the month April, May, and June 2018.

Factors affecting the downfall

Exporters claim the post-impact of GST, reduction in duty drawback, and remission of state levies are some factors which have affected the industry so badly. They believe that the new government initiatives can only bring some transformation in the current situation of the industry, which should be done at the earliest.

The negative trend in export has become one of the most worrying factors affecting the RMG industry.

Raja M Shanmugham, President, Tirupur’s Exporters’ Association said, “With the Government's initiatives, we expect to see the reverse trend this financial year.”  

Experts Opinion

Recently, the export fraternity met the Apparel Export Promotion Council (AEPC) discussing the ongoing challenges in the industry. But an announcement is yet to be made as they believe that it may negatively impact the relationship with their clients.

"A delay will drive our buyers to resort to Bangladesh, Vietnam, Ethiopia, Myanmar and once if they settle there it is difficult to bring them back immediately. Meanwhile, the season will go off with partial orders," the official said.

R Rajkumar, Managing Director, Best Corporations believe that most probably the next year would bring better fortunes for the RMG sector.

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