30 January 2024, Mumbai
India's garment industry is ready for a makeover, and the Apparel Export Promotion Council (AEPC) has the blueprint.
Ahead of the crucial Union Budget 2024, the council is lobbying the government for a strategic injection of tax breaks, market boosts, and simplified regulations to propel domestic manufacturing and exports to new heights.
Nuanced data-points
Topping the wishlist is a uniform 5% Goods and Services Tax (GST) rate across the entire Man-Made Fibre (MMF) supply chain. This move aims to ease the liquidity crunch faced by small and medium enterprises (MSMEs) under the current tiered tax structure.
For non-MSME exporters, the AEPC proposes a hike in the interest equalization rate from 2% to 5%. This would effectively reduce their borrowing costs and level the playing field with competitors.
Vocal for local
Branding 'made-in-India' apparel on the global stage is another key ask. The council seeks budgetary support for brand marketing initiatives, potentially unlocking new markets and increasing demand.
Easing trade procedures is also part of the plan. The inclusion of specific items like drawstrings, elastic bands, and metal tabs in the duty exemption list would streamline imports and reduce costs for garment producers.
Making a business case
Finally, the AEPC argues for a minimum wastage allowance under the Import of Goods at Concessional Rates (IGCR) rules. This would address inconsistencies in waste estimation and simplify customs procedures for exporters.
With February 1st fast approaching and the Indian budget on the horizon, the AEPC's proposals stand as a critical crossroads for the nation's apparel export industry.
Turning point: The government's response will determine the scope and pace of the industry's growth, potentially shaping its future competitiveness and global footprint.
