According to AHEA president NF Mogrelia, the garment exporters are caught in a vicious circle with falling demand and low prices for Indian goods in the international market on the one hand and increasing cost of production and poor productivity levels on the other. "With increasing competition from countries like China, Bangladesh and Korea many garment exporters are finding it difficult to survive in the market. In fact, in Tamil Nadu, nearly 30 per cent of the factories have been closed, 30 per cent are still struggling to survive and are in the verge of closure, another 30 per cent are doing very little business. Only 10 per cent of them are able to manage business with ease with their inbuilt financial strength," he said. This situation can be resolved only if the government brings in changes in the existing labour laws besides a policy framework which will reduce the overheads cost and thereby the overall cost of production.
"Our prices are very high as our productivity is only about a third of that of the competing nations. In India, the productivity is about 6-7 pieces per worker per machine, whereas it is as high as 17-22 pieces in the competing nations. Increase in overhead costs including electricity, water, tax and duties two to three times a year add up to the woes of the exporting community," he said. Higher costs are making the Indian exporters less competitive in the international market. "We are losing orders to our competitors solely on price and delivery factors," he added.
Infrastructure facilities also need to be improved especially at the ports to have a check on congestion. Frequent strikes at the Chennai Port also put exporters to great hardship, Mr Mogrelia said.
Secretary textiles, the government of India, Mr SB Mohapatra said, the government has taken lot of initiatives for the upliftment of the textile industry by creating apparel parks and by providing good infrastructure facilities. "Now, it is for the exporters to build up their abilities by manufacturing high quality and high value garments catering to specific markets. The exporters also should take steps to improve the productivity of their labour by motivating them with lot of incentives. Better manpower development and modernisation will benefit the exporting community at large," he said.