India’s garment exports are expected to register a 15 to 18 per cent growth in fiscal year ’18. Rebate on state levies have been introduced to encourage exports. There is an additional 10 per cent subsidy for the garment and made-up segments, which means the home textile industry will effectively get 25 per cent capital investment subsidy on new machines they bring in, leading to efficiency and modernisation of the sector.

Subsidies have proved be beneficial for the sector and led to an increase in employment and attracted huge investments. The industry is looking at entering into CIS, Africa and Far East markets to increase garment exports, apart from its traditional markets of US and Europe.

The 18 per cent GST is expected to be a major blow to the small manufacturers, most of whom follow the job work basis of manufacturing. India’s readymade garment exports registered a positive growth of just 8.06 per cent in May compared to the corresponding period last year. The decline in growth is attributed to many reasons. One, though exporters are happy with the new rates announced under GST, they need to ensure compliance with GST for input credit for the already existing stock on June 30, which has lead to curtailment in production.