The Apparel Export Promotion Council (AEPC) is lobbying the Indian government for tax incentives and other support measures to boost domestic garment manufacturing and exports in the upcoming Union Budget 2024.
The council’s key requests include a uniform 5 per cent GST rate across the entire Man-Made Fibre (MMF) supply chain to address liquidity issues for small and medium enterprises (MSMEs) caused by the current tiered tax structure.
The council has also sought an increase in interest equalization rate for non-MSME exporters from 2 per cent to 5 per cent, lowering their borrowing costs and improving competitiveness.
Another of AEPC’s recommendations includes a budgetary support for branding and marketing: Promoting ‘made-in-India’ apparel globally would enhance visibility and potentially increase demand.
The council has also urged the government to include specific items like drawstrings, elastic bands, and metal tabs in the duty exemption list.
Further, it has sought a minimum wastage allowance under Import of Goods at Concessional Rates (IGCR) rules: This would address challenges in accurate wastage estimation and simplify customs procedures.
The AEPC's proposals will be submitted ahead of the upcoming Indian budget on February 1st. The government's response will determine the extent to which these measures are implemented, potentially shaping the future of India's apparel export industry.
