Garment exporters expect 6 million jobs to be lost in the coming months if the situation continues. Textile is the largest employer after agriculture and pays Rs 26,000 crore in annual wages. They expect over 15 per cent decline in shipments this financial year to $14 billion on account of reduced incentive on duty drawback and rebate on certain state levies post the rollout of the goods and services tax (GST).

In October and as per exporters exports of readymade garments fell 41 per cent. Exporters expect 6 million jobs to be lost in the coming months if the situation continues. Textile is the largest employer after agriculture and pays Rs 26,000 crore in annual wages. Vinod Dhawan, President, Apparel Exporters and Manufacturers Association (AEMA) says that due to tardy implementation of GST, they are incurring higher expenditure on compliance and other transaction costs.

Various apparel export bodies also voiced concern on competition from Vietnam, Indonesia and Bangladesh and migration of customers to these countries besides the preferential tariff they get in international market. The impact of GST became visible from October and exporters and are seeing a 7 per cent on year decline in order books. Lalit Thukral, President, Noida Apparel Export Cluster stated it is extremely important that the government addresses the issues raised by the industry in order to stem the decline in exports.

Recently, under the Merchandise Export from India Scheme (MEIS) the government doubled the incentive for garments exporters and made it 4 per cent of value of exports from 2 per cent with effect from November 1, 2017, to June 30, 2018.