February 8, 2012
By Kumud Das
INDORE: The decision of the garment traders to import garments from Bangladesh, has left them in jittery situation. Imports will badly affect the garment industry in the state as the cost of production and labour costs here are much higher as compared to that in Bangladesh.
Recently a delegation of garment traders from India who visited Bangladesh had assured to import garments that are about 20% cheaper than Indian garments. There are about 1,500 wholesalers and 3,000 retail units in Indore alone. Out of these, nearly eight units have already reported to be shifting to Bangladesh, where labour and power tariffs are comparatively very low. To add to the woes of garment traders, strengthening of Indian rupee against the dollar has further encouraged the traders in the state to look towards Bangladesh. The Indian Rupee, which had earlier weakened against the dollar and gone down to Rs 52, has climbed back to Rs 48. It has also encouraged the imports of the readymade garments from Bangladesh. Dhanraj Wadhwani, president, retail cloth merchant association, Rajwada, said, “In case Bangladeshi cloth markets begin to pour in, then it will simply make our survival difficult.”
People will prefer Bangladeshi clothes to the ones manufactured within the state. As a result, the local cloth traders will be affected badly. Moreover, it will lead to increase in unemployment in the state, he added. At present, the cloth merchants in the state are paying only 1% in form of entry tax to the government. However, the tax was likely to go upto 7% from April 1, when 5% of VAT and 2% of CST also become applicable on textiles. Moreover, import duty, which used to be 10% of the value of import of textiles in past, has been completely waived off by the Indian government since last year. “It has also jolted us,” said M C Rawat, secretary, MP Textile Mill Association.
When it comes to textile, the stitching charges are less in Bangladesh as compared to that in the state. We are paying a sum of Rs 7000 per month to the tailors in the state per month, whereas it was merely Rs 2500 in Bangladesh, said Rawat. There are nearly 1,20,000 labour working in the textile manufacturing sector of the state as of now. SK Bagchi, former textile commissioner of India, advised the apparel manufacturers in the state to set up large-scale units in the sector.
S P Oswal, chairman of Oswal group, predicted that total value of import of apparels from Bangladesh may cross the mark of $ 1 billion over a period of 3-5 years.
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