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Chennai , Sept 25

THIS year the readymade garment industry has registered an increase of 2.2 per cent in export figures for the period from January to June 2003 while at the same time almost 70 per cent of the units in the small-scale sector have closed down, according to Mr Nariman F. Mogrelia, President, Apparels and Handlooms Exporters Association.

He said that the industry was going through a bad patch with a number of problems such as bad order positions, decreasing prices, increasing costs of products and uncompetitive production.

Quota premiums had also been high on certain categories despite the fact that after 2005 the quota regime would be dismantled and exporters who invested heavily in quotas would not benefit from this investment, Mr Mogrelia said. This year the cut off price for certain categories went up to $7.95, which would automatically, cut the small player out.

The removal of the sector from the SSI segment had also added to its woes. The small units were the backbone of the garment sector, he said.

The ones who had survived were faced with underutilisation of capacity either on account lack of order or inability to accept orders due to quota constraints, he said at a press conference on the occasion of the annual textiles and garments exports conference that is being held here on Septermber 27.

The Minister of State for Textiles, Mr N. Ramachandran, will be the Chief Guest.

The larger producers who were not interested in the slow moving categories were now moving into these too, Mr Mogrelia said. The main reason for this was the buyers who, while driving a hard bargain, also asked for an entire basket of items.

Exporters said that the benefits given to the industry were constantly being reduced. The woven garment sector and the power loom fabric sector had been covered under the excise net from April 1 this year. The Government had increased duty drawback for knit garments by 1.5 per cent but had not done the same for the woven garment sector. They said that domestic fabric prices were 35 per cent higher than China so a large number of Indian garment exporters had started importing fabric. The addition of excise duty at every stage had not helped at all, they said.

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