Excessive Controls, Trade Barriers Blunting India’s Export Edge in Apparel Sector: Ex FM Chidambaram

New Delhi, Oct 3 (KNN) Former Union Finance Minister P Chidambaram has urged the government to take decisive steps to support the apparel industry, a crucial sector for employment generation and export growth in India.

Speaking at a session titled "How Can India Boost Its Exports of Textile and Create Millions of Jobs," organised by the All India Professional's Congress on Wednesday, Chidambaram stressed the need for technological upgradation, reduced tariff control, and scaling up of garment manufacturing units.

Chidambaram criticised the government's lack of action, pointing out that despite a decline in apparel exports, no concrete measures have been taken to reverse the trend.

“An economy under excessive control cannot compete in the global market,” he said, highlighting the role of rising customs tariffs in hampering export competitiveness. The average tariff, which was 8 per cent when the BJP government took office in 2014, has since risen to 13 per cent.

He cited data from the Apparel Export Promotion Council, noting that India’s apparel exports had fallen from USD 16.2 billion in 2022-23 to USD 14.5 billion the following year. While a modest recovery is projected for 2024-25, export levels remain below the 2022 figures.

In contrast, during the same period, apparel exports from Bangladesh surged by 65 per cent, while India's fell by 15 per cent. “If the government is aware of this data, it has done little to address it,” he said.

Chidambaram further argued that government intervention through mechanisms like the Company’s Act, Income Tax Act, and DGFT rules has created an overly regulated business environment.

He emphasised that sustained growth in the apparel sector will require cutting import duties, particularly on essential technology and inputs, which will help modernise the industry.

"China’s decline has benefited Bangladesh and Vietnam, but not India. This is due to our high tariffs and excessive controls," he stated.

He also urged the private sector to invest in technological upgradation, and suggested that if the private sector falls short, the government should step in to provide support.

Economist Rathin Roy and All India Professional's Congress Chairman Praveen Chakravarty also participated in the discussion, along with garment exporters who called for free trade agreements, improved infrastructure, and increased automation to address the skilled labor shortage.

(KNN Bureau)