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