AEPC is expecting around Rs. 5,000-crore fresh investments into the sector in the current fiscal which may create as many as two million jobs.
Describing the Rs. 6,000-crore textile booster package announced by the Government as a “game-changer,” the AEPC Chairman, Mr. Ashok G. Rajani, said that, based on the initial feedback he has received, around Rs. 5,000 crores may flow into the industry in fresh capex this fiscal year itself.
This additional investment into the apparel sector, which has not seen any investments for years, alone can create as many as two million jobs this year, he said, adding that the impetus will be on the near-doubling of the capital subsidy to 25 per cent of one’s investment.
Asked whether the industry will be able to meet the Government target of creating 10 million jobs and $30 billion in export earnings by 2020, Mr. Rajani said: “Without any doubt, it is achievable. In fact, I am optimistic that we should be easily crossing these targets as the entire industry is very happy with the package and bullish on investments. After all, we aren’t a capital-intensive but a highly labour-intensive industry.”
Mr. Rajani further said his company, Flair Exports, will be setting up a new factory this year itself and is scouting for the right location in Navi Mumbai and he needs Rs. 6-7 crores to open the new factory with 250 machines. “We will hire 300 more people for this factory, to add to the existing 750-strong workforce.”
Asked how the scheme would help raise exports, he said the six percentage points margins coming from the package will help him grow by at least 25 per cent to Rs. 75 crores from the present Rs. 60 crores.
He said the 9.5 per cent duty on exports is still a major concern, since competitors from Vietnam, Bangladesh and Cambodia don’t pay it. However, the enhanced duty drawback of 12.25 per cent, up from 7.25 per cent, is the biggest takeaway from the package for the industry.
The Cabinet, on June 22, cleared a Rs. 6,000-crore incentive package for the textiles and apparel sector to create one crore new jobs over the next three years, and attract investments worth $11 billion and generating $30 billion in exports.
Helped by the Government’s special package and marketing plans, India’s textiles and apparel exports are expected to touch the $50-billion mark this fiscal, up from $38 billion in FY16.
“The Government has announced a special package and is taking elaborate marketing plans to boost exports. We are hopeful of achieving $50 billion in exports in the current fiscal as compared to $38 billion exports last year,” the Textile Secretary, Ms. Rashmi Verma, said.
“We are hopeful that our key markets like Europe and the US will continue to grow. We are also exploring new markets such as Iran, Russia and South America to expand reach and diversify products. With the opening of new markets, we are hopeful of achieving our export targets,” she added.
She said the country is ready to capitalise on the falling share of Chinese textile exports in the world market.
The nation’s market share has slipped to 38 per cent from 40 per cent due to high wage rate and its entry into high-end tech products.