The readymade garments industry, excluding exports, is set to double to Rs 4 lakh crore in the next five years with the removal of excise duty and increased demand for branded garments.
According to Rahul Mehta, President of the Clothing Manufacturers Association (CMA) of India, the industry has started moving in the positive trajectory after growth was stalled by the 10 per cent excise duty imposed last year.
The industry is now looking to target a growth of six to seven per cent this year, and 10-12 per cent next year. The apparel market is estimated at Rs 200,000 crore, with the unorganised sector accounting for Rs 110,000 crore, followed by unstitched apparels such as dhoti and sarees amounting to Rs 50,000 crore. “Even as demand appears buoyant, rising cotton and yarn prices and the shortage of skilled labour pose a major challenge. Besides, the huge competition between leading brands has led to a price war with over 65 per cent of merchandise being sold at discounted prices as compared to 40 per cent earlier,” Mehta said in a press conference.
Apparel index
In order to gauge the progress of the garment industry, the Association has come out with a quarterly CMA domestic apparel index. With a base of 100, the index will capture the growth, investment trends and future plans of the top 50 brands.
Currently, said Mehta, the index is pegged at 118, indicating that the industry is 18 per cent positive on future growth.
Despite gloomy global markets, apparel exports have grown 15 per cent to $2.3 billion in the first two months of this fiscal.
Premal Udani, Chairman, Board of Trustees, CMA, said the government has set a target of $17 billion for this fiscal.