Apparel-August 2020 | Page 14

Market Watch CMAI requests Government for temporary levy of Additional Import Duty on Import of Readymade Garments The Clothing Manufacturers Association of India (CMAI), representing the interests of close to 4,000 members and servicing over 20,000 Retailers, has written to the Hon Minister of Textiles Smt Smriti Zubin Irani, and the Hon Minister of Commerce and Industry Shri Piyush Goyal, and has submitted a representation to the Government to consider levying a temporary Additional Covid Duty on all imports of Apparel and Readymade Garments, including on those garments imported from countries with whom India has a Free Trade Agreement, especially Bangladesh. CMAI has for long been drawing the Government’s attention to the dangers posed by the Duty-Free Imports of Garments from Bangladesh, and with it the back-door entry of Chinese fabrics into India - and its consequent impact on the MSME dominated Domestic Garment Industry. The significant rate of growth of these imports are well documented, and need no repetition, except to state that the surge continues unabated, as the following table would highlight: IMPORTS OF READYMADE GARMENTS (IN MILLIONS OF US$) 2016– 2017– 2018– 2019– 2017 2018 2019 2020 (E) 18-19/16/17 Total Imports 96 773 11061207 102% From Bangladesh 140 201 365409 192% % Share Of B’desh 23% 24% 33% 34% The Government has in several of our discussions and interactions also pointed out to the various treaties signed with Bangladesh and other SAFTA countries, and that it would be difficult, if not impossible, to dilute those agreements. Amid temporary Store closures, Indian Fashion Retail is heading towards uncertainty Amidst the chaos of Covid-19, the world has witnessed a major collapse in economy. Stock markets are crashing and business shutdowns have delivered a powerhouse kick from which recovery will be painfully slow. Multinational companies, manufacturing industries have become vacant resulting in stagnancy of financial resources. Apparel brands and retail companies are also being severely impacted as governments order malls, shops etc, to shut down thus initiating lockdown across states to combat the spread of Covid-19. In such uncertain times, near-term growth may see sharp deceleration given higher concentration of stores in metro and Tier I/II cities owing to lower footfalls. A report shared by ICICI securities states that given higher operating leverage (30-35 per cent of the fixed costs), near-term margins may be impacted. Coupled with relatively higher valuation before Covid-19, the stocks are likely to remain under pressure in the near term.— www.indianretailer.com 12 I APPAREL I August 2020