Business

Indian Apparel Industry To See Rs 5,000 Crore Investment This Year: AEPC

Apparel industry body, AEPC is expecting around Rs 5,000 crore fresh investments into the sector during 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 late last month as a "game-changer," Apparel Export Promotion Council (AEPC) chairman Ashok G Rajani said that based on the initial feedback he has received, around Rs 5,000 crore 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% of one's investment.

When asked whether the industry will be able to meet the government's target of creating 10 million jobs and US$ 30 billion in export earnings by 2020, Rajani said, "Without any doubt, it is very much doable.

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 capital-intensive industry but highly labour-intensive one." Rajani, who runs a company called Flair Exports, said his company will be setting up a new factory this year itself and is scouting for the right location. The factory will be in Navi Mumbai and he needs Rs 6-7 crore to open the new factory with 250 machines. "We will hire 300 more people for this factory to add to our 750 workers now," he said.

When asked how the scheme will help raise exports, he said the six percentage points margins that will come from the package will help him grow by at least 25% to Rs 75 crore from the present Rs 60 crore. He, however, said the 9.5% duty on exports is still a worry, which competitors from Vietnam, Bangladesh and Cambodia don't pay.

He said the enhanced duty drawback of 12.25%, up from 7.25%, is the biggest takeaway from the package which leaves the ball in the court of the industry as the government has given it the best deal possible.