Labour reform can raise garment jobs

Poor labour reforms and high inputs costs are holding back the clothing industry from becoming a bigger employer, said Premal Udani, president, Clothing Manufacturers Association of India.

The government has not been fast enough in refunding the taxes paid in the process of garment exports, he added. The result is non-competitive prices when it comes to competing with countries like China and Bangladesh.

India needs to go in for value-addition. To strengthen the argument, Udani said only $1.5 is realised through export of a kg of cotton while export of a kg of cloth earns $15.

With India entering the WTO regime and ending of the quota system, the industry is at a crucial stage where it can compete globally and grow tremendously globally.

If reforms are not taken up soon, India will lose all the advantages it enjoys due to ineffective or inadequate government support measures, Udani said.

The Indian readymade garment industry contributes 6 per cent to the GDP and is the largest generator of "dignified and gender-sensitive" employment.

The sector contributes $6.5 billion towards exports and it is the largest exporter after IT while employing over one crore. But it is not getting the attention it deserves.

Indian market has great potential for expansion and consumption level is very low. While in the US per capita consumption is 200 pieces, in India it is only eight.

Ramesh Chandra, member secretary of the Empowered Committee of State Finance Ministers spoke on Implementation of VAT in the Garment Industry.

He pointed out that VAT is more transparent, simpler and allows for the filing of returns on-line. Another positive aspect of VAT is it will result in a revenue growth without any increase in prices, he added.

On the industry in Bangalore, CMAI says it employs over 3,00,000 women workers and it is a Rs 4,000 crore industry.

With major buyers and sellers from south India in Bangalore, the CMAI found Bangalore to be the right place for the First South India Garment Fair. The fair will have 105 stalls.