Apparel Export Promotion Council (AEPC) an apex body for promoting the garment exports in India has made certain demands on behalf of the apparel industry for the ensuing Union Budget 2024.
Sudhir Sekhri Chairman AEPC said, “With the complete value chain and commitment for compliance driven quality products, India is all set to unleash its prowess in the textiles and apparel sector by being a significant global player.” The long-term policy for garment industry related schemes will provide stability in the policy regime and will be a pro-active step to help garment exports from the country.” Further, Sekhri said that a 5% rate for all exporters under the Interest Equalization Scheme for a minimum period of 5 years is one of our top demands from the Union Budget.
Mithileshwar Thakur, Secretary General AEPC observed, “This labor-intensive sector needs the right push and all the support from the Government as it holds the key to the generation of massive employment opportunities for the youth and empowerment of women, which in turn can drive the change in the socio-economic landscape of the country.”
Here are the few top recommendations/ wish list from the government in the ensuing budget;
• AEPC requests to increase the rates under the Interest equalization Scheme to 5% for all the Apparel exporters for a period of 5 years. This will increase the apparel industry’s competitiveness in the international market.
• All types of trimmings and Embellishments should be covered under Import of Goods at Concessional Rates of Duty Rules (IGCR Rules)
• Timeframe for utilization of Trimmings and Embellishments imported under Import of Goods at Concessional Rates of duty Rules (IGCR Rules) should be extended to 1 year
• Import of courier mode shipments should also be allowed the duty free benefit under IGCR. At present trimmings and embellishments are allowed duty free under IGCR is available only for shipments done under cargo mode and not under courier mode.
• Custom duty on high-end textile machinery should be reduced. The custom duty should be brought down to zero percent for three years to enable technology upgradation. Subsequently, a high tariff wall should be raised on import of textile machinery to encourage foreign investment in textile machinery manufacturing.
• Request to make uniformity in GST for the entire value chain- A uniform GST of 5% across the value chain for all fibres. Inputs into the man-made fabric segment (Fibre and Yarn) attract a higher GST than the final product, i.e., apparel. While the GST rate for fibre is 18%, yarn 12%, fabric 5% and GST for Apparel (worth less than Rs.1000/- is 5% and for Garment above Rs.1000/-, the GST rate is 12%. This leads to accumulation of tax at input stage. The inverted tax structure blocks the working capital for businesses due to input tax credit accumulation. Hence, AEPC requests for a uniform GST of 5% for fibre, yarn, fabric and garments, for both MMF and cotton-based products.
• Request to provide subsidized loans for readymade garment manufacturers who incorporate organic, locally sourced inputs and invest in green technologies
• Incentivize factories for traceability initiatives in the raw material supply chain
• Relocation compensation to companies moving to hinterlands from the Industrial complexes and cities.
• Request to provide direct tax concessions to apparel manufacturers adopting ESG and other international quality norms and compliances.
• Request to provide budgetary support for branding and marketing of Made in India products
