New AEPC chief seeks trade relief, Budget support as US tariff squeezes apparel exporters
A Sakthivel, Founder of Tiruppur-based Poppys Knitwear Pvt Ltd, is considered the father of the apparel industry. With over five decades in the industry, he assumed charge as Chairman of the Apparel Export Promotion Council (AEPC) on Tuesday for a record fifth term. In his first interview to a media house after taking over as Chairman, Sakthivel shares with businessline his views on how US tariffs are affecting textile exporters, besides a host of other topics.
The US tariff is the biggest issue currently facing the textiles industry. How is the industry going to handle it if this prolongs?
The industry is making efforts to diversify export markets beyond the US, especially towards Russia, Japan, South Korea, Chile, and South Africa. The recently concluded FTAs with the UK, New Zealand and Oman will help exporters diversify into these markets and improve the global position of the Indian apparel industry.
The industry is also intensifying efforts to scale efficiencies, higher value-added product manufacturing, and fast-tracking sustainability compliance in line with global buyer requirements. This will partially offset the tariff burden. Engagement with the Government is ongoing to seek appropriate trade reliefs and targeted market-linked support schemes to neutralise the tariff disadvantage faced by Indian exporters.
The industry is strongly advocating expeditious conclusion of the India–US Bilateral Trade Agreement negotiations to achieve a long-term resolution to the tariff issue.
Has the industry accepted the increased US tariffs?
The industry has not accepted the increased tariff as a permanent reality, but is managing pragmatically in the short term. India faces a 50 per cent tariff - higher than Bangladesh, Vietnam (20 per cent), and Cambodia/ Indonesia/ Malaysia (19 per cent).
What is your primary agenda as chairman of AEPC?
The foremost will be product and market diversification. We need to promote export of man-made fibre garments for which global demand is high and we have a scant share. India’s apparel export is highly cotton-centric and its apparel exports are largely concentrated in the US, EU, and UK.
We need to diversify exports towards non-conventional and non-traditional destinations. The focus will be on making Indian apparel exports sustainable, especially in view of recent and upcoming EU regulations around sustainability.
What is the industry’s demand from the Union Budget?
The industry wishes for strengthening interest subvention under the Export Promotion Mission, including enhancement of the interest subvention rate from 2.75 per cent to 5 per cent and relaxation of the current annual value cap of ₹50 lakh per year, to ease credit constraints for MSME exporters.
We need reintroduction of a concessional tax rate of 15 per cent under the Income Tax Act to incentivise new manufacturing companies and boost investments in the sector. We need provision of accelerated depreciation benefits for apparel exporters to strengthen the liquidity position and global competitiveness of Indian exporters.
The loan moratorium falling due between September 1 and December 31, 2025 must be extended. The industry wants introduction of a new Technology Upgradation Scheme focused on micro units in the MSME segment, in view of the expiry of ATUFS and the non-coverage of micro enterprises under the PLI scheme, to stimulate capital upgradation.
The industry in Tiruppur is the worst affected. Hailing from Tiruppur, is there anything that you wish to do for your hometown?
Given the inability to compete on price in the short run, Tiruppur exporters are encouraged to leverage their strong sustainability, compliance, and responsible manufacturing credentials as key differentiators.
Tiruppur is known as the knitwear capital of India. This is the right time to transform it into the apparel capital of India through greater product diversification across all apparel categories, including woven products.
We will encourage Tiruppur manufacturers to establish factories to make swimwear, pullovers and jerseys, brassieres and sportswear.
read more :- Sharp jump in cotton imports from zero duty window
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