Apparel Export Promotion Council (AEPC) – Recommendations for managing demonetisation transition

New Delhi
Mon, 2016-12-19

In order to facilitate transition in the Indian readymade garment export industry towards making digitisation and less cash usage, Apparel Export Promotion Council (AEPC), the apex council for the garment exports in India, has shared key recommendations with the government. A larger objective of the recommendations is also to help connected workers in the industry best adjust. These recommendations will be discussed at the AEPC Export Awards 2015-16.
The recommendations were developed from a detailed survey conducted amongst garment exporters in major apparel cluster:

  1. Liquidity of Cash:  The exporting units may be allowed a higher threshold of cash withdrawal for making payments to Artisans, loaders, purchases for developing new samples and for payment towards small freight amount.  

Availability of adequate cash in the valid currency notes should be made available at banks in key clusters.
(2)  Creation of Unique identity: The bank account of workers, working in RMG export sector should be opened on the basis of unique identity. The account should be maintained in Employees Provident Fund Organization (EPFO) in lieu of initiating a fresh KYC (Know Your Customer) requirement by the bank.  Banks may be allowed to take PAN details of the employer instead of the employees wherever and whenever the situation demands it. 
 (3)  Relaxation of Payments:The statutory payments made by the garment exporters towards discharge of PF / ESI / TDS / Service Tax should be relaxed for sometime.
All statutory returns to Central / State Government should be allowed a grace period for submission.
 (4)  Extension of timeline: Industry demands Reserve Bank of India (RBI) to notify general extension in the realization of export proceeds to 365 days on account of demonetisation. 
(5) Increase in deposit rate of interest: The deposit rate of interest should be increased, so that it encourages retention of credit balance in the books of accounts maintained by banks, rather than withdrawal of cash
 (6) Develop a campaign: Government could initiate a campaign towards buyers and other stakeholders, projecting India in positive manner due to demonetization of specified currency.Indian Embassies abroad may be provided with posters and other electronic literature, in support of positive developments, as a result of demonetization.

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Financial support for MAI Scheme should be considered for approved events of 2016-17 for incentivising importers’/ buyers’ visit to India in large number.  A quick approval by the Government, in this regard is recommended so that buyers can be informed well in advance.      
(8)  Harmonious relations in labour matters: Indian readymade garment exporters should not be penalized for non-performance in labour related matters. The law enforcing agencies falling under Labour Department, Revenue Department and other tax authorities should assist exporters in the transition phase by relaxing policy / procedural inadequacies.    
There should also not be other export obligations with authorities like Custom, DGFT, and RBI etc.

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(10)  Priority sector treatment: Garment export activity i.e. inbound as well as outbound cargo should be considered under priority sector and be treated accordingly.
The garment export industry, where the wage component is around 25% to 30% of FOB (Free-on-Board) value of exports; should be considered as a priority export sector. 
The findings of the survey and recommendations have been shared with the government for consideration.
Initiatives undertaken by AEPC to manage demonetisation transition:

  • Organising nation-wide Account opening Camps in the clusters- Delhi, Noida, Gurgaon, Faridabad, Mumbai, Kolkata, Chennai, Bangalore, Tirupur, Ludhiana, Jaipur. 8065 new accounts were opened in the mentioned clusters
  • UPI awareness sessions conducted in the above mentioned clusters
  • Over 10 workshops have been held across India, covering over 1200 exporters, for creating awareness on Special package for apparel.

 
For further information, please contact:
Chandrima Chatterjee -advisorcc@aepcindia.com (9810448917)