Doubling of minimum wages to hit exports, jobs: AEPC

Published on : August 18, 2017 Topic : Global Trade
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NEW DELHI: Minimum wages in the garment industry if doubled to Rs 18,000 per month will jack up costs, hit exports and lead to job losses, a top exporters' body claimed today.

AEPC called on the government to clear the air on the issue.

In a letter to the textile ministry, Apparel Export Promotion Council (AEPC) Chairman Ashok G Rajani said there is a lot of confusion surrounding minimum wages after clearance of the Wage Code Bill by the Cabinet.

"This has impacted the booking of export orders, and to restore confidence of foreign buyers, it is important that a suitable clarification is issued by the government," Rajani said in the letter.

Rajani added that the cost of wages in the garment export sector is around 30 per cent of Freight on Board, which is the highest by any standard.

"The apparel industry is already passing through a challenging phase due to slowdown of the world economy. In the present stressful and challenging times, any additional burden on account of doubling the minimum wages from the present about Rs 9,000 per month to Rs 18,000 will make garment manufacturing unviable and unsustainable in future," he explained.

Rajani stressed that around 70 per cent of the workforce in the ready-made garment industry are women while other industries have female workforce participation of 3-7 per cent.

"Hence, fixing of minimum wages at Rs 18,000 per month will not only adversely affect the exports, but lead to a fall in employment generation in the sector," he pointed out.

The Union Cabinet last month approved the new Wage Code Bill which will ensure a minimum wage across all sectors by integrating four labour related laws.

The new minimum wage norms will be applicable for all workers irrespective of their pay. At present, the minimum wages fixed by the Centre and states are applicable to workers getting up to Rs 18,000 monthly.

Source: The Economic Times
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