INDUSTRY PULSE manufacturing destinations . Earlier our Europe and South America-based buyers would compare our rates with Bangladesh , China and Vietnam , but now they have started to explore Sri Lanka also , so competition is consistently challenging for us ,” shares V . Gopal Krishna , MD , Sri Sairam Clothing , Tirupur .
It is pertinent to mention here that many of our competitors have preferential trade agreements with several global markets that make them more competitive . A befitting example is the shift in exports from India to Bangladesh and Vietnam in trousers . Even as the EU surged in trouser imports by 6.98 % in volumes , India saw dip in trousers ’ exports to the EU in volumes by 11.16 % ( the dip in values was of 11.72 %). Whereas , Bangladesh registered growth of 12.19 % and Vietnam of 6.71 % in volume terms during the same period . Even in these conditions , India is under pressure from the World Trade Organization to phase out subsidies and incentives given to the textiles sector as it has already achieved ‘ export competitiveness ’.
Though challenges are many , people in the industry believe that there is a marginal improvement in the situation , not only due to favourable exchange rate , but also because of the funds situation getting better . In addition , people seem to be getting a grip and understanding of regulatory framework , which some feared had engulfed the industry that had been getting out of the way .
“ I have sensed that things are getting a bit better in last one month or so , but it has been terrible since last two years , mainly due to factories facing fund shortage and orders not being up to the expectation ,” says Rajeev Tyagi , Director , Arielle Sourcing . The industry at large agrees that having to deal with confusion about GST adjustments has taken away a lot of time and efforts of the industry in the last one year , as people were involved in understanding and adhering to complying with changing internal requirements , rather than focusing on actual merchandise exports .
Vijay Agarwal is very honest in his analysis when he says , “ There are no major global issues ; in fact global economy is doing much better except that globally all buyers are looking for competitive prices , and India has a serious disadvantage because of competing countries having drawback duty advantage . On top of it , internally after introduction of GST , considerable reduction in our drawback and RoSL percentage , the industry is still paying embedded taxes which are not refunded through drawback route , and which is making industry noncompetitive and non-viable .” On a very serious note , Vijay Agarwal adds , “ My hope is that the Government gives proper attention and priority to this industry and provides level playing field , otherwise all I can see is closure of factories and employment going down . I hope and pray better sense prevails and industry is given the due attention it deserves .”
‘ UNRESPONSIVE ’ GOVERNMENT , A CONCERN …
Rajeev Tyagi backs Vijay Agarwal ’ s opinion that the Government is not really supporting the industry the way it should . “ The biggest problem for the industry today is that there is no focus on exports , though as eyewash , it seems like a lot is being done . As an example , we hear of efforts to explore new markets , but none of them is as strong in terms of value and volume which could replace USA and European markets ,” he reasons . Many manufacturers believe that unless incentives are given to exporters , there seems to be very little possibility of growth . Even the recent meeting of industry heads with the textile and finance ministers has failed to impress the industry . “ Ministers and Government officials should meet SMEs to get a proper feel of industry issues as SMEs have much more trouble and their problems too require solutions on priority basis . But sadly , SME sector is being ignored . When was the last time a Minister or any official met the small exporters or exporters of Tier-II cities ?” questions Charan Jeet Singh , Director , JJ Overseas , Jaipur .
A majority of small- and even middlelevel exporters are unhappy with the way the Government is handling the situation . Expressing frustration faced by this segment of exporters , Rajiv Kapoor , MD , Affordable Exports , Delhi says , “ In last six months whatever meetings or interaction that I have had with buyers or feedbacks received from various seminars
Unit price from India to European Union was down to Euro 20.10 in January to March 2018 period whereas the unit price was Euro 20.75 in the same period last year
“ There are no major global issues ; global economy is doing much better except that globally all buyers are looking for competitive prices , but India has a serious disadvantage .”
– Vijay Agarwal , Chairman , Creative Group
“ Despite rupee depreciating against the greenback by almost 7.5 per cent in recent months to trade around Rs . 68 per US dollar , India ’ s apparel and textile exports have not been benefited from the trend .”
– Jaspal Dehal , CEO , Majestic Global and events that I attended has been disappointing , in fact , I could not find any positive element . The Government has done nothing except to increase the problems . In my 32 years of existence in the industry , I called my bank for help for the first time but even the senior officials are helpless . Bank limit was earlier easily allowed to be surpassed in a reasonable proportion , but now despite all our best efforts , the limit does not increase even a little , as senior bank officials have less powers now .”
The banks are on a very strict advisory as news regarding bank frauds are now coming out so often . “ The banking sector is giving a tough time to exporters especially in regard to delayed remittance , if any , from overseas or L / C discrepancy due to which exporters are now deciding which buyer to do orders with and which buyer to refuse based on bank diktat rather than their own analysis ,” shares Rajeev Tyagi . Top exporters argue that low debt companies will survive and grow , which is true in every industry .
MARGINS ARE AT ALL TIME LOW …
Companies really want to move above the situation but with little help coming , it is becoming a struggle . “ The Government has made only false commitment as there has been no support coming in last few months and we don ’ t see any positive indication , even for the future . There is business , but only for survival as margins are not there and we can just run our machines but can ’ t generate the profits which we deserve or at least that much which can push us for further business . Even buyers are not giving any positive signs for
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