A decline of nearly 4 percent in terms of the American dollar has resulted in FY18 for India’s readymade garment exports (RMG) in the course of the first year of implementation of the Goods and Services Tax (GST). The decline in terms of rupee is much higher and stands at 7.6 percent.
Between FY17 and FY18 the RMG exports registered a decline from USD 17.4 billion to USD 16.71 billion which is a 3.8 percent decline.
A month-on-month decline in dollar terms has resulted in a fall in RMG exports. The decline began in October 2017 with 39.30 percent decline and ended with a 17.8 percent decline in March 2018. In the month of March, the figures for RMG exports stood at USD 1.49 billion as against USD 1.81 billion in the previous year’s corresponding month.
The apparel export figures indicate that they are heading towards a recession, which is worse than stagnating. The shrinkage that has resulted in the industry is a matter of grave concern. The Apparel Export Promotion Council expressed this sentiment.
The RMG exporters are facing challenges from global factors such as free trade agreements (FTAs). Their failure to acquire the requisite FTAs with markets like Europe, UK and US has undermined their ability to perform in the global markets. Besides, the RMG exporting community has faced blockage of funds due to the implementation of GST in July 2017. In addition, export incentives like duty drawback and rebate on state levies have reduced their fund availability.