Apparel export industry should be treated at par with MSME sector

Due to the impact of COVID-19 pandemic, apparel exporters on Monday urged the government to treat the labour-intensive sector at par with MSMEs. In a letter to Prime Minister Narendra Modi, Apparel Export Promotion Council of India (AEPC) Chairman A Sakthivel said the sector is facing huge losses due to non-payment of export bills and cancellation of orders. We would request that the apparel exporting industry may be treated at par with the MSME sector as we work on wafer-thin margins of 4-5 percent. Domestic exporters have a huge pile-up of inventories because of lockdown in several countries, he said adding the industry is one of the largest employers of the country employing 12.9 million people directly.

He also said the benefits related with Employees’ Provident Fund (EPF) should be extended to the sector, irrespective of the number of workers employed and more specifically to cover all the apparel exporting units, since they are highly labour intensive with a huge women workforce.

“A large number of our exporters lost huge money by booking forward contracts and we feel that the loss can be converted into a working capital-term loan with repayment in three years with a 6 per cent interest rate,” he added.
Sakthivel further suggested that the facility of granting additional working capital to all MSMEs without collateral may also be granted to all apparel exporting industries irrespective of their size.