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.
According to a PTI report: 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 per cent of one’s investment.
When asked whether the industry will be able to meet the government’s target of creating 10 million jobs and $30 billion in export earnings by 2020, Rajani was quoted by PTI as saying, “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 on.,” Rajani was further quoted by PTI as saying.
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 hands now,” he was quoted by PTI as saying.
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 per cent to Rs 75 crore from the present Rs 60 crore.
He, however, said the 9.5 per cent 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 per cent, up from 7.25 per cent, 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.
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.