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AEPC sounds alarm on production decline

AEPC has been engaging with policy makers for an early resolution of the issues which are hampering the apparel industry, post GST roll out. India’s apparel production has shown a decline of 10.4 per cent for the period April to January 2017-18.

There has been a month to month decline in apparel productivity. From a positive growth of 1.3 per cent in April 2017, May saw a fall of five per cent. In June the decline was 3.2 per cent, while in July it was 5.1 per cent. August, September, October, November and December recorded a 6.4 per cent, 7.2 per cent, 11 per cent, 13.1 per cent and 13.5 per cent dip respectively.

There has been a gradual decline in the production on account of issues which have arisen after the implementation of GST.

This has come at a time when exports are already registering a decline. The industry is suffering as their funds are blocked and they are unable to pay suppliers on time. Suppliers don’t give advance, since they can’t carry them forward for an indefinite period.

Suppliers don’t give advance, since they can’t carry them forward for an indefinite period. This has resulted in the decline in apparel production. The biggest deterrent to the industry’s sentiments has been the severe capital blockage due to the dual constraint of delays in RoSL disbursements and IGST refunds. Until the refunds start flowing, things will not improve.

If the capital blockage continues and the cost competitiveness of the industry is not restored, the slippage in exports will continue, with long term adverse impact on India’s positioning in this sector.

 
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