Ludhiana’s hosiery industry is troubled by delays in refunds. The delays pertain primarily to the Technology Upgradation Fund and the Rebate on State and Center for Taxes levies (ROSCTL). For the past nine months, garment exporters have not received their ROSCTL refunds, valued at around Rs 5,800 crores. Due to this, the working capital of the industry is stuck. Exporters have urged for refunds on time, increase in duty drawback, faster loans and subsidies and incentives. Another problem is cheap imports from Bangladesh. Bangladesh's share of apparel exports worldwide was 2.6 per cent in 2000, which rose to 7.7 per cent in 2018. India's share has increased from three per cent to just 3.3 per cent in these 18 years. The uneven duty structure plagues exporters. The duty on raw materials and machinery is too high while the duty on imports of finished goods is too low. There is a 22 per cent to 24 per cent custom duty being levied right now.
There are about 12,000 hosiery units in Ludhiana. Most are in the small and unorganized sector. These small companies want yarn banks to be set up which can buy yarn from mills and give it to small entrepreneurs at low prices and so keep down their cost.