Karnataka - Bangalore   

Excise duty on apparels opposed

Bangalore: Most garment and hosiery units in the State catering to the domestic market downed their shutters on Monday in protest against the 10 per cent excise duty on apparels, hosieries and made-ups, which was announced in the Union Budget 2011-12. Speaking to The Hindu, P.H. Rajpurohit, Chief Convenor of the Federation of Readymade Garment, Hosiery and Made-up Associations of India, estimated the loss on account of the strike in the State to be about Rs. 100 crore. He said the total loss due to the all-India strike in the major textile manufacturing centres on Monday would have been about Rs. 350 crore. The strike continues on Tuesday. “A significant proportion of the 5,000 units in the State participated in the strike,” Mr. Rajpurohit said. A large proportion of the units are located in Bangalore, Chickballapur, Bellary and Mysore.

A top city-based exporter who did not wish to be identified told The Hindu that the industry “stands divided” on the issue.

While the larger units, especially those who are focused on overseas markets, have stayed away from the protest, the smaller units that concentrate more on the domestic market, are “more seriously impacted by the excise duty,” he said.

However, in recent months, even those who have traditionally preferred to address export markets have started to seek draw a certain proportion of their revenues from the domestic market.

A leading exporter, who sold only five p.c. of his output in the Indian market in 2010, said he planned to increase this proportion to 20 p.c. by 2012. “The vagaries of the international market have convinced me that I ought to address the local market more aggressively,” he said.

Mr. Rajpurohit admitted that although the large exporters have stayed away from the protest, “they have offered indirect support”. He said the imposition of the duty comes after a prolonged spike in the prices of a range of raw materials that go into garment production. “Cotton cloth prices have increased by over 70 p.c. in the last four months as have price of yarn and accessories,” he said.

Garment manufacturers claim that the excise duty hike would require that they incur additional expenses to maintain records pertaining to the duty. “On an average, we will have to spend about six per cent more in order to ensure the maintenance of records, which means that the additional cost would be at least 16 p.c. for final consumers,” he said.

The federation has called for a silent dharna in front of Mahatma Gandhi statue on M.G. Road on Tuesday.

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