Apparel Exports in India

The exports of garments and clothing accessories from India increased by 17.6 percent in the
first six months of the ongoing fiscal year 2014-15 to touch US$ 8.3 billion, over the same
period of the previous fiscal year, according to the Apparel Export Promotion Council (AEPC).
In fiscal year 2013-14, Indias apparel exports increased by 15.7 percent year-on-year to $15.001
billion.
About 65 per cent of the garments exported to the US and European market were from China a
couple of years ago, but now it is reduced to 40 per cent
Now India exports about 25-30 per cent of the textile goods to the global market and the figure is
likely to increase in one year. Earlier the textile industry was based in some areas but now the
industry spans across the country.
Growth in Indian apparel exports is due to the increasing labour cost in China, non-compliance
of large number of factories in Bangladesh, high rate of inflation, currency appreciation, etc.,
which provided relative advantage to Indian exporters.
Garment Industry has highest potential to shift the additional unutilized labor out of agriculture
and lift large population above the empowerment line. To jumpstart job creation, India will need
to improve its business and investment climate, especially the labor incentive sector like the
garment industry. This sector with the adequate support of the Government can be a big supplier
of skilled labour and help Make in India initiative of PM a reality
A small push from the Government with its policy support may help India to get more business
as overseas buyers are looking at India as safe and reliable option for sourcing apparel. However,
to capture the space in market left by China and Bangladesh, Indian exporters will have to be
competitive in pricing, apart from being able to meet strict timelines, and better quality delivery.

Government Act/Rules for Exports

Following Act/rules are available which are relevant from exports point of view Customs Act,
1962,Customs, Central Excise and Service Tax Drawback Rules, 1995,Export Manifest
(Aircraft) Regulation, 1996.etc.
They can be readily found on www.cbec.gov.in
These include information about regarding the agreements between nation, the custom and tariff
rules, baggage rules, valuation and drawback rules, and rules on how to make appeals.
Documents to be filled with Custom Department for Exports
Under the manual system, shipping bills in the format as prescribed in the Shipping bill and Bill
of Export (form) Regulations, 1991 was required to be filed for effecting exports. However, in
the EDI System, only a declaration in the prescribed format the required to be filed either
through the Service center, or through EDI over ICEGATE.

A declaration in the format Annexure-A

Copy of Export invoice
SDF declaration
Drawback/DEEC/DFRC/DEPB declaration/ AR-4s etc., as applicable
Packing list
The Service Center assigns a Job No. to the declaration. The job is entered and a checklist is
generated for verification of data by the exporter/CHA. After verification, the data is entered to
the System by the Service Center operator and the system generates a Shipping Bill Number,
which is endorsed on the printed sheet and returned to the exporter / CHA.
For export items which are subject to export cess, the TR-6 challans for cess is printed and given
by the Service Center to the exporter/CHA immediately after submission of shipping bill.

Policy supports given to the Apparel Industry

Rationalization of the excise duty regime - The inverted duty structure that prevailed earlier
with higher duties for fibers and filaments and lower for fabric has been rectified to some
extent.

Although the optional zero duty route for the cotton value chain has helped a large number of
yarn and fabric manufacturers , excise duty route is still adopted by a lot of people in order to
take cenvat credit for expenses made on dyes and chemicals, packing and other inputs.

Custom duty - Between 2005-06 and now, custom duty has been progressively reduced from
20% to 10%. For textile machinery it has been further reduced to 5%, since 2005-06, for
specified items.

Incentives in 2008-09 through various stimulus packages :

Across-the-board cut of four percent in the ad valorem central value-added tax effected from
Dec 2008.

Interest subvention of two percent on export credit for labour intensive sectors was restored
in Dec 2008, after withdrawal in September 2008.

Full refund of service tax paid by exporters to foreign agents was another provision added in
the December stimulus package.

Limits under the credit guarantee scheme for small enterprises doubled in December stimulus
package. Besides this, lock-in period for loans to small firms under credit guarantee scheme
reduced.

Import duty on naphtha for use by the power sector reduced to zero. This may have some
indirect benefit to the industry through cheaper power.

In Feb 2009, reduction in excise duty and service tax by 2% was announced.

FDI liberalization

AEPC with the assistance of government has come up with a scheme for mobilization of FDI
into India in textile and garment sector

Privileges given to Export Houses and Trading Houses

A Status Holder shall be eligible for privileges as under

Authorization and Customs Clearances for both imports and exports on self-declaration
basis;
Fixation f Input-Output norms on priority within 60 days;
Exemption from compulsory negotiation of documents through banks. Remittance/Receipts,
however, would be received through banking channels;
100% retention of foreign exchange in EEFC account.
Exemption from furnishing of BG in Schemes under FTP;
SEHs and above shall be permitted to establish Export Warehouses, as per DoR guidelines.
For status holders, a decision on conferring of ACP Status shall be communicated by
Customs within 30 days from receipt of application with Customs.
As an option, for Premier Trading House (PTH), the average level of exports under EPCG
Scheme shall be the arithmetic mean of export performance in last 5 years, instead of 3 years.

APEC Apparel Export Promotion Council

AEPC, is registered under section 25 of the Companies' Act 1956. It works closely with
Government of India on policy issues in Apparel sector. The Council provides specialized
services and global business opportunities for industry.
Situated in Gurgaon, Apparel House also offers 250 permanent showrooms besides Institute of
Apparel Management & Headquarters of AEPC's Education and Training Initiatives. Apparel
House is equipped with modern state-of-the-art infrastructure having international facility for
business with exhibition hall, art gallery, auditorium and conference hall facility. Members take
part in various council's activities being organized at Apparel House like Market Week etc.

APEC assists by

Organizing Buyer Seller Meets

Spearheading trade delegations to potential markets.

Participation in specialized international fairs.

Organizing seminars

Integrating skill human resource development through its Education & Training initiatives
like Apparel Training & Design Centres (www.aepcindia.com/atdc ) and Institutes of Apparel
Management (http://www.aepcindia.com/iam)

Disseminating information to trade through publishing a monthly magazine, "Apparel India"

AEPC's website provides detailed info on policies, data, events, schemes as also database on
suppliers and buyers.

AEPC's publications like Country Reports and Market Focus Reports are available to
members in CD at concessional rates.

A well equipped library (in Mumbai and Gurgaon) with over 100 latest fashion related and
valuable market trend publications is available to the trade members for their reference.

AEPC's media cell

Conducting market surveys and providing market intelligence through various cluster
studies, research reports & journals.

Exploring new markets and identifying items of export potential (Already undergoing a New
Product Development Scheme for Trade under MoC).

Developing new markets for existing products through various export promotion activities
like Road shows, leading trade delegations, etc.