According to CIAe, the apparel exports industry is quite unique where 99 per cent of the produce is exported but still exporters do no opt for the 100 per cent EOU status. They claim that, already bogged down by enormous paperwork, imposition of excise has added fuel to fire resulting in additional cost and time delay.
In the last budget, the government had withdrawn the SSI status to garment units to attract higher investment in this sector.
CIAe president Amit Goyal said: In our pre-budget recommendations, we have demanded restoration of the SSI status to the garment industry because it is the only tool by which small players can survive. And this is the right time for the government to give more assistance through such incentives.
The governments steps to bring garment segment into the excise net was illogical. Smaller sectors do not need excise duties as many smaller players have ventured into this sector to earn their bread and butter, Mr Goyal said.
The textiles and apparel industry is a major thrust area for Indias exports. The sector has grown from a mere Rs 50 crore industry in the 1970s to a Rs 25,000 crore industry in 2003-04.
CIAe claims that the industry still has great potential to grow even further. The industry accounts for six per cent of GDP and almost 35 per cent of the total export earning of the country. The apparel industry gives employment to about 18 million people who are directly or indirectly connected with this industry.