Perfect Sourcing - April 2016

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The Grass on the other side is always Green….

The recent news in various newspapers about the textile and apparel industry looks quite contradictory, not in the sense that they are wrong but there is a lot of confusion about the real growth of apparel and textile industry growth in India.

According to a World Bank Report, rising wages in China will presents huge opportunity to the apparel sector in India with a possibility of creating up to 1.2 million jobs in the country.

The potential decrease in Chinese exports presents a huge opportunity for South Asian countries, which currently accounts for 12% of global apparel exports.

Now at the same time when the news is being shared, another breaking news comes in (especially for the apparel exporter) wherein the Central Government proposes to amend Rule 25(2) (iv) of the Contract Labour (Regulation & Abolition) Central Rules, 1971 to ensure minimum monthly wage of Rs 10,000 to contract workers of the country.

Apparel exporters’ body AEPC has strongly opposed Rs 10,000 as minimum payable wages to contract labour, saying if it is implemented, the industry will not be able to afford the existing level of employment and hence capacities and turnover will be affected. AEPC said it could lead to a decline of at least 10 per cent in the export turnover, i.e. Rs 11,000 crore of exports in a year and a proportionate decline in employment. “For apparel manufacturers, the increase will be around 26 per cent more on account of PF (12 per cent), ESI (4.75 per cent) and Bonus (8.33 per cent). Adding service tax, the total incidence is 41 per cent. Hence, they will effectively have to pay Rs 14,100 to a contract labourer, an increase of over 100 per cent for some states. Read More....www.perfectsourcing.net