TIRUPUR: Readymade garments (RMG) exports dropped by 3.84 per cent in August. Exporters have said that they are not able to confirm orders since, after the implementation of the Goods and Services Tax (GST), duty drawback and rebate of state levies (RoSL) are yet to be decided.

 

In August 2017, Rs 8,556.35 crore worth of RMG exports were reported as against Rs 8,897.77 crore a year ago, a drop of 3.84 per cent.

 

Tirupur Exporters Association President Raja M Shanmugam said that the trend would continue as exporters are not able to take new orders since, after the GST implementation, the threat of loosing drawback to the tune of five-six per cent has prevented worried exporters from confirming orders.

 

After September, the duty drawback rate will come down and the real pinch of GST will start only from October. "This is going to be a very big threat to the growth of RMG," Shanmugam said.

 

Exporters have appealed to the authorities to rectify this anomaly through policy intervention in whichever way possible. If the trend continues, India's share in global RMG exports is expected to come down to 3.5 per cent this year and to three per cent next year.

 

There is also an apprehension that all benefits to exporters will cease from January 1 since the Country has agreed and signed in the World Trade Organization that no incentive would be given after the Country's per capita income reaches $1000 for three consecutive years. The Country has reached that status already.

 

On the sector's outlook, exporters said that the delay in concluding the free trade agreement with the European Union has allowed China, Vietnam, and Bangladesh to grab the opportunities.

 

 

 

 

Soures : dailyshippingtimes.com