RMG exports from India have been falling continuously over the past few months. Apparel exports have been plummeting since October 2017. There was a sharp fall of 16.6 per cent in May 2018. The main problem faced by the garments industry is the block in GST refunds, slow disbursements in Rebates on State Levies (RoSL) and the sharp decline in RoSL rates which has led to working capital’s drying up.

While the larger units have somehow managed to survive, many small units are not in a position to take orders. Exporters have not been able to book orders in the peak summer season and losing markets to competitors from other countries such as Bangladesh and Vietnam.

To help garment exporters, the Merchandise Export from India Scheme for garments and made-ups has been extended indefinitely. Under the MEIS scheme, garment and made-up exporters get duty exemption scrips, freely transferable for cash, worth four per cent of their total exports. The rate of incentive for the two sectors was doubled to four per cent from two per cent in October 2017 when exports started slipping. As a result, India’s overall cotton exports are likely to rise 21 per cent for the cotton year ending this September.