Export of readymade garment from surat

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Chapter: 01 Introduction
1.1. Introduction to Indian Textile Industry
 The Indian textile industry is one the most important industries for the Indian economy. Its
importance is underlined by the fact that it accounts for around 4% of GDP, 14% of the
industrial production and 17% of the country’s total export earnings. Besides, the sector
employs nearly 35 million employees; the textile industry is the second-largest employment
generating industry in both rural and urban areas, after the agriculture industry.
 The vast pool of skilled and unskilled workers, availability of labour at low costs, strong base
for production of raw materials characterize the textile industry in India. The increase in
domestic demand and ability of the units in the industry to process small or customized
orders are some of the advantages for the textile industry in India. The textile sector is highly
diverse and has hand-spun and hand woven segments at one end of the spectrum, and capital-
intensive, sophisticated and modern mills at the other.
1.1.1. Industry Structure
 The textile industry is vertically-integrated across the value chain and extends from fiber to
fabric to garments. At the same time, it is a highly-fragmented sector, and comprises small-
scale, non-integrated spinning, weaving, processing and cloth manufacturing enterprises.
 The textile sector has always been an important part of people’s lives in India. Much before
industrialisation, hand weavers and handloom workers contributed to the growth of the
industry. The government framed policies during 1950-1970 for the development of SSIs in
the sector; as a result, the power loom and handloom sectors, mainly small and medium
scale enterprises, were decentralised.
1.1.2. Various categories of Indian textile Industry
 Indian textile industry can be divided into several segments, some of which can be listed as
below:
o Cotton Textiles
o Silk Textiles

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o Woolen Textiles
o Readymade Garments
o Hand-crafted Textiles
o Jute and Coir
 India textile industry is one of the leading in the world. Currently it is estimated to be around
US$ 52 billion and is also projected to be around US$ 115 billion by the year 2018.
 The textile export of the country was around US$ 19.14 billion in 2006-07, which saw a stiff
rise to reach US$ 22.13 in 2007-08.
1.2. Introduction to Readymade Garment Industry of India
1.2.1. History
 Indian sub continent is the second largest manufacturer of garments after China being the
global leader in garment production. India is known for its high quality garments for men and
most of the garment manufacturers are in the Small and Medium scale industry. Indian men's
clothing industry has been growing steadily over the past few years, this has been possible
owing to the Indian male becoming more fashion conscious, and hence there is more
consumption which has increased global demand of men's garments by the rest of the world.
 India Garment Industry has an advantage as it produces and exports stylish garments for men
at economical prices due to cheap labour rates. Today the by the way of Technological
advancement and use of sophisticated machinery it has enabled the manufacturers to achieve
better quality and well designed garments. India's Garment Industry has been rapidly
growing in last few years. Exports have been rising as there is an increase in orders from
global buyers accompanied by a rise of investments in the garment sector of the country. The
Garment Industry is of major importance to the Indian economy as it contributes
substantially to India's export earning, it is estimated and analyzed that one out of every six
households in the country depends on this sector either indirectly or directly for its
livelihood. From all over the world the Retailers also increasingly come to India attracted by
low production costs. The large brands among them are Wal-Mart, Tesco, and M&S.

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1.2.2. Brief Introduction
 India's Garment Industry is a well-organized enterprise and is among the best in the world. It
constitutes of designers, manufacturers, exporters, suppliers, stockiest, and wholesalers.
Indian Garment Industry has carved out a niche in the global markets and earned a reputation
for its durability, quality and beauty. Today's changing consumer preferences - buying
branded apparel and fashion accessories, major boom in retail industry, people shopping at
department and discount stores, shopping malls, with rising disposable incomes, government
policy focused on fast-track textile export growth, and ambitious goals have created several
investment opportunities in India.
 Government has even made effort to include benefits for Garment Industry. The annual plan
for 2007-08 formulated by Indian government to promote the textile sector, includes schemes
for attracting foreign direct investments, brand promotion through public-private partnership
(PPP) for global acceptance of Indian brands, trade centers for facilitating business and
image building, fashion hubs as a stable marketplace for Indian fashion, common compliance
code for creating apparel standards for the benefit of buyers, and training centers for
developing human resources. Indian garment industry`s has a decentralized production
structure - subcontracting, which is low risk and low capital-has served the industry well but
has excluded Indian products from the mass market for clothing, which demands consistent
quality for large volumes of a single item.
1.2.3. Employment Opportunities
 Indian Garment Industry is closely connected to the fashion industry and grows hand in hand.
With these even opportunities for the employment is also increasing to a larger extent. These
high levels of fashion consciousness has created the need for candidates who are highly
productive, efficient and have a passion to create new designs and give way to creativity.
This Industry demands and requires both skill and diligence. India is an ultimate
combination, like it has a matured garment industry for a long time along with a vast trained
manpower. Some of the key areas to work are related to design and manufacturing,
merchandising, import export according to the government policies, freight and shipments
etc. work as designer, or a start up a business in the local market and expand the business to
the others areas of the national market.

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1.2.4. Indian Garment Industry at Glance (2014-15)
 India is the second largest producer of garments in the world. The Indian garment industry is
expected to grow to a size of US$ 223 billion by 2021, according to a report by Technopak
Advisors. This industry accounts for almost 24% of the world’s spindle capacity and 8% of
global rotor capacity. Abundant availability of raw materials and skilled workforce have
made the country a sourcing hub for the world garment industry. The Indian garment sector
contributes about 14 per cent to industrial production, 4 per cent to the gross domestic
product (GDP), and 27 per cent to the country's foreign exchange inflows. It provides direct
employment to over 45 million people. The Indian Garment industry is set for strong growth,
supported by strong domestic consumption as well as export demand.MMF (man-made
Fiber) production increased by about 4 per cent during FY2014. Cloth production by mill
sector registered a growth of 6 per cent during FY2014. The total cloth production grew by 3
per cent during the same period.
 Textiles exports registered a growth of 14.58 per cent. Garment exports from India is
expected to touch US$ 60 billion over the next three years according to industry experts. The
Indian Garment Industry attracted foreign direct investment (FDI) worth Rs 6,710.94crore
(US$ 1.11 billion) in FY2014. Improved demand from the US market, rising labor cost in
China would be a boost to the Indian textile exports. The total value of textile products
exported from India touched US $35.4 bn in FY14, which was 12% higher compared to
FY13. The US has been the primary market for Indian garment exporters.

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Chapter: 02 Research Methodology
2.1. Title
To study Export of readymade garments from Surat.
2.2. Objectives of Research
The research aims to:
1. To understand what are the factors that influences export of Readymade garments.
2. To know the factors which hinders the export of Readymade garments.
2.3. Research Design
 In this project in order to meet the research objectives, descriptive research design is used for
study.
Variables for the study
a. Financial assistance b. Selling price c. Taxation/ Subsidies
d. Export packing e. Insurance f. Export inspection fees
g. Custom clearances h. Custom fees i. Cash terms or credit terms
j. Total turnover- exports
and local sales
k. Procedure and
documentation
l. Rejected goods
2.4. POPULATION
 The population for this project is people or organizations who are exporting readymade
garments to other countries.
2.5. SAMPLING
2.5.1. SAMPLING TECHNIQUE: convenience sampling under unprobabilistic
sampling technique will be used.
2.5.2. SAMPLE SIZE: In this project 32 sample size is taken.
2.5.3. SAMPLE FRAME: As total population is not known. Sample frame cannot
defined.

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2.6. Data Collection
TYPE OF DATA
Primary data: Questionnaire and personal discussion with People who exporting
Readymade garments.
Secondary data: Data published by Apparel Export Promotion Council of India.
2.7. INSTRUMENT USED
 Questionnaire – In Questionnaire, both open ended and structured questions are used. In
structured questions dichotomous questions, rating questions, and Grid type questions are
involved.
METHOD
Survey Method…... In this method Data is collected by convincing and asking question to
those people who are using Pearson publication books or have used these books in past.
2.8. Data Analysis:
 Non parametric tests, factor analysis, chi square, cross tabulation, Graphical charts, pie
charts, Bar charts are used.
 The data was processed through tabulated frequency distributions using the SPSS program.
A cross tabulations statistical technique was then used to test and establish the strength of
the relationship between the variables. And factor analysis was used.
2.9. Limitation of Work
 The survey is limited to Surat area only.
 Study of buying behaviour is only based on sample size.
 Level of accuracy of results of research is restricted to the accuracy level with which the
customers have given answers and the accuracy level of the answer cannot be predicted.
 The findings are based solely on the information provided by the respondents and there is
a possibility of biased results.

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Chapter: 03 Data Analysis
3.1. Description about data analysis tools.
a. Pie chart
 A pie chart displays data, information, and statistics in an easy-to-read 'pie-slice' format with
varying slice sizes telling you how much of one data element exists. The bigger the slice, the
more of that particular data was gathered.
 The main use of a pie chart is to show comparison. When items are presented on a pie chart,
you can easily see which item is the most popular and which is the least popular.
b. Bar chart and column charts
 A bar chart or bar graph is a chart that presents grouped data with rectangular bars
with lengths proportional to the values that they represent. The bars can be plotted vertically
or horizontally. A vertical bar chart is sometimes called a column bar chart.
 A bar graph is a chart that uses either horizontal or vertical bars to show comparisons among
categories. One axis of the chart shows the specific categories being compared, and the other
axis represents a discrete value. Some bar graphs present bars clustered in groups of more
than one (grouped bar graphs), and others show the bars divided into subparts to show
cumulative effect
 Bar charts and column charts are similar: only their orientations differ. A bar chart is
orientated horizontally, whereas a column chart is arranged vertically. Sometimes "bar chart"
refers to both forms.

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3.2. Data Analysis
Question: 1 in which country you are exporting?
Name of the country Frequency Percent
USA 12 37.5
UK 9 28.13
EU 11 34.38
Canada 12 37.5
Other (Sri-lanka, Russia etc) 8 25
Total 32 100
INTERPRETATION:
 Large number of exporters exports in USA and Canada and they both together
contribute 60% of the market.
 While EU that is European Union countries consist of 1/3 of the market.
 Only 25% exporters exports in other countries which include Sri-lanka, Russia.
12
9
11
12
8
Destination country for the exports of
Readymade garment.
USA
UK
EU
Canada
Other (Sri-lanka, Russia etc)

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Question: 2: How often do you export in a year?
Particular Frequency Percent
1-3 times a year 2 6.3
10 or more times a year 6 18.8
Total 32 100.0
INTERPRETATION:
 40.6% of exporters export 7 to 9 times a year and very few exporters exports 1 to 3 times a
year.
 While 1/3 of the exporter are having shipment to foreign market for 4-6 times a year while
only 6 exporters are able to export more than 10 times a year.
2
11
13
6
Frequency of Exports in a year
1-3 times ayear
4-6 times ayear
7-9 times ayear
10 or more times a year

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Question # 03: As an exporter, rate following factors related to Destination country on the
scale of 1 to 5.
Parameter Strongly
Agree (5)
Agree
(4)
Neutral
(3)
Disagree
(2)
Strongly
Disagree (1)
Population of
destination country is
very large
Frequency 0 12 15 5 O
Percentage 0 37.5 46.9 15.6 0
Standard of living of
destination country is
high
Frequency 0 20 12 0 0
Percentage 0 62.5 37.5 0 0
per capita income is
very high
Percentage 3.13 40.63 40.63 15.65 0
Banking and financial
services are proper
Percentage 21.9 21.9 43.8 12.5 0
Climate of destination
country is influencing
you to export
Percentage 0 34.4 43.8 18.8 3.13
Political condition is
sound in destination
country
Percentage 6.25 37.5 37.5 18.75 0

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INTERPRETATION:
 Population of country where they export is not very large and not very small and 15.6% of
exporters totally disagree that population is large.
 62.5% agree that standard of living of country where they export is very high and 37.5% are
neutral.
 3.1% of exporters are strongly agree that per capita income is very high, 40.6% are agree and
neutral and only 15.6% disagree that per capita income is not very high.
 43.8% are neutral about banking and financial services 21.9% are agree that banking and
financial services are proper and 12.5% disagree with it.
 Climate of destination country affects to large number of exporters for exporting goods. Few
exporters that is 18.8% and 3.1% disagree with it.
 37.5% agree that political condition is sound of destination country. 18.8% disagree with it.
37.5
62.5
40.63
21.9
34.4
37.5
46.9
37.5
40.63
43.8 43.8
37.5
15.6
0
15.65
12.5
18.8 18.75
0
10
20
30
40
50
60
70
Population of
destination
country is
very large
Standard of
livingof
destination
country is
high
per capita
income is
very high
Banking and
financial
services are
proper
Climate of
destination
country is
influencing
you to export
Political
condition is
sound in
destination
country
Strongly Agree
Agree
Neutral
Disagree

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Question # 04: As an exporter, rate following factors related policy and assistance schemes
of India on the scale of 1 to 5.
Parameter Strongly
Agree (5)
Agree
(4)
Neutral
(3)
Disagree
(2)
Strongly
Disagree (1)
Government of India
gives good exemption
from Sales Tax/ VAT
Percentage 0 59.4 31.3 9.4 0
Government of India
from Excise Duty
Percentage 3.1 46.9 40.9 9.4 0
Government of India
from Income Tax
Percentage 32.3 28.1 25 12.5 0
Government of India
gives good
concessions on Import
of Inputs which are
meant for exports
Percentage 0 31.3 46.3 21.9 0
Government of India
gives good amount of
subsidies
Percentage 0 37.5 50 12.5 0

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INTERPRETATION:
 Large numbers exporters agree that Government of India gives good exemption from Sales
Tax/ VAT and very few that is 9.4% disagree that Government of India gives good
exemption from Sales Tax/ VAT.
 31.3% strongly agree that Government of India gives good exemption from Income Tax and
only 3.1 % disagree that Government of India gives good exemption from Income Tax.
 Large exporters are neutral that Government of India gives good concessions on Import of
Inputs which are meant for exports.
 50% of exporters are neutral that Government of India gives good amount of subsidies and
only 12.5% disagree.
59.4
46.9
28.1
31.3
12
31.3
40.9
25
46.3
16
9.4 9.4
12.5
21.9
4
0
10
20
30
40
50
60
70
Governmentof
India gives good
exemption from
Sales Tax/ VAT
Governmentof
India gives good
exemption from
Excise Duty
Governmentof
India gives good
exemption from
IncomeTax
Governmentof
India gives good
concessions on
Import of Inputs
which are meant
for exports
Governmentof
India gives good
amount of
subsidies
Strongly Agree
Agree
Neutral
Disagree

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Question: 5: Do you think development of E-commerce and information technology has
influenced you for exports?
Frequency Percent
Disagree 2 6.3
Neutral 18 56.3
Agree 12 37.5
Total 32 100.0
INTERPRETATION:
 37.5% exporters are influenced by e commerce. 6.3% are not influenced by e commerce.
That is e commerce is influencing many exporters.
6.3
56.3
37.5
Do you think development of E-commerce
and information technology has influenced
you for exports
Disagree
Neutral
Agree

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Question # 06: As an exporter, rate following factors related policy and regulations of the
destination country.
21.9
0 0
53.1
18.8
6.3
21.9
68.8
50
3.13
12.5
46.88
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
You are exporting
because local market of
readymadegarment has
saturated.
PackagingRegulations of
Destination country are
very high
Export licensing
Requirementsof
very high
Disagree
Neutral
Agree
Strongly Agree
Parameter Strongly
Agree (5)
Agree
(4)
Neutral
(3)
Disagree
(2)
Strongly
Disagree (1)
Custom duties of
very high
Percentage 21.9 53.1 21.9 3.13 0
Packaging
Regulations of
Destination country
are very high
Percentage 0 18.8 68.8 12.5 0
Export licensing
Requirements of
very high
Percentage 0 6.3 50 46.88 0

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INTERPRETATION:
 53.1% are neutral that Custom duties of Destination country are very high, 21.9% agree that
Custom duties of Destination country are very high and only 3.1% disagree with it.
 More than half of exporters are neutral that Packaging Regulations of Destination country is
very high.
 Only 6.3% agree that Export licensing Requirements of Destination country is very high and
43.8% disagree that Export licensing Requirements of Destination country are very high.
Question # 07: As an exporter, rate following factors related Local market of yours on
following parameters.
Parameter Strongly
Agree (5)
Agree
(4)
Neutral
(3)
Disagree
(2)
Strongly
Disagree (1)
You are exporting
because local market of
readymade garment has
saturated.
Percentage 6.3 31.3 43.80 18.75 0
You are exporting
because your garments
are out of fashion in
local market
Percentage 0 12.5 46.88 40.63 0
You are exporting
because competition is
increasing in local
market.
Percentage 6.3 21.87 25 46.88 0

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INTERPRETATION:
 6.3% are exporting because local market of readymade garment has saturated. 18.8% do not
agree that local market of readymade garment has saturated and 43.8% are neutral. So
majority are saying that they are exporting not because that Indian market has saturated.
 12.5% of exporters are exporting because there garments are out of fashion in local market.
40.6% says that there garments are not out of fashion in local market and 46.9% are neutral.
 6.3% and 21.9% of exporters exports because competition is increasing in local market
46.9% say that they are not exporting because competition has increased in local market.
6.3
0
6.3
31.3
12.5
21.87
43.8
46.88
25
0
5
10
15
20
25
30
35
40
45
50
You are exporting
because local
market of
readymade
garmenthas
saturated.
You are exporting
because your
garments are out
of fashion in local
market
You are exporting
because
competitionis
increasingin local
market.
Strongly Agree
Agree
Neutral

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Question # 08: As an exporter, rate various factors related issuing licenses on following
parameters.
0
10
20
30
40
50
60
GettingImport-
export code (IEC )
is very easy
Getting
Registrationcum
Membership
certificate(RCMC)
is easy
AEPC is able to
provide you real-
time access to
database
0
6.25
0
31.3
25
37.5
43.8
53.1
21.4 Strongly Agree
Agree
Neutral
Parameter Strongly
Agree (5)
Agree
(4)
Neutral
(3)
Disagree
(2)
Strongly
Disagree (1)
Getting Import- export
code (IEC ) is very
easy
Percentage 0 31.3 43.80 25 0
Getting Registration
cum Membership
certificate (RCMC) is
easy
Percentage 6.25 25 53.1 12.33 3.13
Getting Registered with
chambers of commerce
is easy
Percentage 0 37.5 21.4 34.3 6.25

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INTERPRETATION:
 31.3% agree that Getting Import- export code (IEC) is very easy and 25% disagree with it.
While 4 out of 10 exporter disagree with it.
 25% exporters agree that Getting Registration cum Membership certificate (RCMC) is easy
and 12.5% disagree with it. 53.1% are neutral. So exporters find getting RCMC Very
difficult.
 37.5% agree that getting registered with chambers of commerce is easy and 34.4% disagree
with it. So we can say that exporter believe that getting registered with FICCI is easy
Question # 09: As an exporter, rate various factors related to Apparel export promotion
council (AEPC) on following parameters.
Parameter Strongly
Agree (5)
Agree
(4)
Neutral
(3)
Disagree
(2)
Strongly
Disagree (1)
AEPC is able to provide
you good marketing
assistance
Percentage 0 37.5 34.37 28.13 0
you information about
global tenders and
opportunities
Percentage 0 21.87 62.5 15.63 0
you real-time access to
database
Percentage 0 34.37 28.13 34.37 3.13

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INTERPRETATION:
 37.5% agree that AEPC is able to provide you good marketing assistance and 28.1%
disagree with it. While other 30% of the exporter are indifferent about it.
 Large numbers of exporters are neutral that AEPC is able to provide information about
global tenders and opportunities. 21.9% agree and 15.6% disagree that AEPC is able to
provide information about global tenders and opportunities.
 34.4% agree that AEPC is able to provide real-time access to database, 28.1% are neutral and
34.4% disagree so only 1/3 of the exporters believe that they have data available with them.
37.5
21.87
34.37
34.37 62.5
28.13
28.13
15.63
34.37
0 0 3.13
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
you good marketing
assistance
you information about
global tenders and
opportunities
you real-time access to
database
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree

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Question: 10: As an exporter, rate various factors documentation on following parameters.
9.4
6.3 6.3
0
59.4
21.9
15.6
18.8
21.9
62.5
50
37.5
9.4 9.4
28.1
43.8
0
10
20
30
40
50
60
70
Details asked in
Packing list are very
High
Details asked in
commercialbill are
very high
Gettingbill of lading
is easy
GettingMate receipt
is easy
Strongly Agree
Agree
Neutral
Disagree
Parameter Strongly
Agree (5)
Agree
(4)
Neutral
(3)
Disagree
(2)
Strongly
Disagree (1)
Details asked in
Packing list are
very High
Percentage 9.4 59.4 21.9 9.4 0
Details asked in
commercial bill
are very high
Percentage 6.3 21.9 62.5 9.4 0
Getting bill of
lading is easy
Percentage 6.3 15.6 50 28.1 0
Getting Mate
receipt is easy
Percentage 0 18.8 37.5 43.8 0

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INTERPRETATION:
 59.4% say that very high list are asked in packing list, 9.4% say that not very high list are
asked in packing list and 21.9% are neutral.
 62.5% are neutral, 21.9% agree and 9.4% disagree that Details asked in commercial bill are
very high. So export commercial bill are more informative then local market.
 Half exporters are neutral that getting bill of lading is easy, 15.6% agree and 28.1% disagree.
So exporters believe that getting bill of lading is difficult.
 18.8% say that Getting Mate receipt is easy and 43.8% disagree and they find it difficult
while 4 out of 10 are indifferent about it.
Question 11: Exchange Rate fluctuations are very high in case of exports
Frequency Percent
strongly agree 2 6.3
Agree 17 53.1
Neutral 13 40.6
Total 32 100.0
6.3
53.1
40.6
Exchange Rate fluctuations are very high in
case of exports
strongly agree
Agree
Neutral

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INTERPRETATION:
 Generally all exporters agree that Exchange Rate fluctuations are very high in case of
exports and it consists of total 60% of the exporters.
 While 40% of the exporters are neutral about exchange rate because they might be exporting
for cash in advance terms.
Question: 12 Export Procedures are very long and tedious.
Frequency Percent
strongly agree 5 15.6
Agree 19 59.4
Neutral 3 9.4
Disagree 5 15.6
Total 32 100.0
INTERPRETATION:
 Large numbers of exporters are saying that Export Procedures are very long and tedious
and very few disagree with it.
 6 out of 10 exporter say that processes are very long.
 While 15% of the exporter strongly agree that export procedures are very long.
15.6
59.4
9.4
15.6
Export Procedures are very long and tedious.
strongly agree
Agree
Neutral
Disagree

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Question: 13 were you asked for certificate of origin at the port of Destination?
Frequency Percent
yes 2 6.3
No 30 93.8
Total 32 100.0
INTERPRETATION:
No, exporters are not asked for certificate of origin at the port of Destination. Only 6.3% of the
exporters were asked for certificate of origin.
Question: 14: were you charged anti-dumping duty by the port authority of the country of
destination?
Frequency Percent
yes 19 59.4
No 13 40.6
Total 32 100.0
INTERPRETATION:
 59.4% were charged anti-dumping duty by the port authority of the country of destination
and 40.6 were not charged anti-dumping duty by the port authority of the country of
destination.

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Question: 15: Which mode of payment is preferred by you?
Cash in advance 15 48.4%
Letter of credit 20 64.5%
Documentary collection/ Draft/ Bill of exchange 7 22.6%
Open account 4 12.9%
Total 32 100.0
INTERPRETATION:
 Generally cash and letter of credit is preferred for mode of payment.
 Half of the exporters prefer cash in advance because it gives surety accepting the goods.
 While 7 out of 10 exporter prefer L/C because it gives credit to buyer while Exporter gets
confirmation to receive payment.
 While 3 out of 10 exporter prefer draft and opening an account which is differing from
situation to situation.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Cash in
advance
Letter of
credit
Documentary
collection/
Draft/ Bill of
exchange
Open
account
48.40%
64.50%
22.60%
12.90%
Mode of Payment
Mode of Payment

26 | P a g e
Question #16: which kind of letter of credit is preferred by you?
Type of L/C Frequency Percent
Revocable L/C 7 30.4%
Irrevocable L/C 6 26.1%
Confirmed L/C 9 39.1%
unconfirmed L/C 1 4.3%
Transferable L/C 9 39.1%
Assignable L/C 1 4.3%
Revolving L/C 4 17.4%
Back to Back letter of credit 10 43.5%
Total 32 100.0
INTERPRETATION:
 Back to Back letter of credit, transferable and confirmed is mainly preferred. Other letter
of credit is rarely preferred by exporters.
 33% of the exporters are using back to back L/C because they are repeatedly exporting.
 While 25% of the exporters prefer confirmed L/C because it gives assurance of payment.
 While 33% of the exporters use transferable L/C to release their payment earlier.
 While other L/c are used in less manner depending on the situation.
7
6
9
1
91
4
10
Type of L/C
RevocableL/C
IrrevocableL/C
ConfirmedL/C
unconfirmedL/C
Transferable L/C
Assignable L/C
RevolvingL/C
Back to Back letter of credit

27 | P a g e
Question #17: Which types of risks are covered by you in insurance?
Type of risk Frequency Percent
Free of Damage insurance 5 16.1%
Fire and Sea perils 10 32.3%
Named Perils 0 0%
All risk insurance 20 64.5%
Total 32 100
INTERPRETATION:
 Generally all types of risk are covered in insurance which includes all type of risks are
covered during transportation.
 While only 1/3 of the exporters are covering fire and sea perils that is fire in jettison and
ship and robbery.
 While only 17% exporters are taking free damage insurance for their cargo.
16.10%
32.30%64.50%
Type of risk covered
Free of Damage insurance
Fire and Sea perils
Named Perils
All risk insurance

28 | P a g e
Question:18 What is the duty draw back that you have received?
Duty draw back summary
Description of good
being exported
Unit When cenvat facility has not
being availed
When cenvat facility has
being availed
Drawback
Rate
RS in Unit Drawback
Rate
RS in Unit
Of Men & child
Cotton Piece 7.9 55 4 27.8
Man Made fibre Piece 10.5 57 3 20.8
Silk Piece 7.0 96 3.6 49.4
Wool Piece 7.9 55 4 27.8
Of Women
Cotton Piece 7.9 55 4 27.8
Man Made fibre Piece 10.5 57 3 20.8
Silk Piece 7.0 96 3.6 49.4
Wool Piece 7.9 55 4 27.8
Interpretation:
 Here we can say that duty drawback is not constant across different categories and it is
also changing when cenvat facilities are availed and when they are not availed.

29 | P a g e
Question: 19: Which currency is preferred by you while exporting?
Currency Frequency Percent
Indian Rupee 19 61.3
US Dollar 15 48.4
Euro 4 12.9
Pound 5 16.1
Total 32 100.0
INTERPRETATION:
 Indian rupee and us dollar is generally preferred. Very few prefer other currency such as
Euro and pound.
 Here we can say that big market is USA and hence US Dollar is more expected.
61.3
48.4
12.9
16.1
Currency Preferred (%)
Indian Rupee
US Dollar
Euro
Pound

30 | P a g e
Question# 20: From the following, which products you are exporting?
Male Shirts 13 41.9%
Male T-shirts 11 35.5%
Male Trousers 9 29%
Male Jeans 9 29%
Ladies Blouse 3 9.7%
ladies kurties 9 29%
Ladies Tops 10 32.3%
Ladies Skirts 7 22.6%
Ladies Jeans 4 12.9%
Dress 17 54.8%
Children wear 5 16.1%
Other 5 16.1%
Total 32 100.0
13
11
9
9
3
9
10
7
4
17
5
5
Male Shirts
Male T-shirts
Male Trousers
Male Jeans
Ladies Blouse
ladies kurties
Ladies Tops
Ladies Skirts
Ladies Jeans
Dress
Children wear
Other
0 5 10 15 20
Product Exported
Product Exported

31 | P a g e
INTERPRETATION:
 Dress and male shirts are mainly exported by exporters.
 17 exporters are exporting dresses which include various dress and Patiala Suits while 13
exporters are sending Male shirts to foreign markets.
 But from above chart we can say that Export of Garments made for gents are more than
those which are made for ladies and Children.

32 | P a g e
3.3. Cross Tabulations
1. Between type of risks covered and frequency of export
How often do you export in a year? Total
Types of risks 1-3 times a
year
4-6 times
a year
7-9 times
a year
10 or more
times a year
Free of Damage insurance 0 0 2 2 4
Fire and sea perils 1 4 2 3 10
All risk insurance 1 8 10 3 22
Total 2 11 13 6 32
Chart showing relationship between type of insurance covered and Frequency of exports
Interpretation:
 So from this cross tabulation between frequency of exports and type of risks covered
following conclusions can be made.
0
1 1
0
4
8
2 2
10
2
3 3
0
2
4
6
8
10
12
Free of Damage
insurance
Fire and sea perils All risk insurance
Frequencyofexports
Type of risk covered
1-3 times a year
4-6 times a year
7-9 times a year
10 or more times a year

33 | P a g e
o Those exporter who are exporting more than 7 times a year tend to take all risk
insurance because their main business is in foreign market rather then in local
market and hence risk involved is very high.
o Those who are exporting 4-6 times a year tend to take fire and peril insurance or
all risk insurance.
2. Between mode of payment and type of risk
Mode of payment Types of risks Total
Free of Damage
insurance
Fire and sea
perils
All risk
insurance
Cash in Advance 2 4 12 18
Letter of Credit 2 4 16 22
Bill of exchange/ Draft 2 1 6 9
Open account 0 3 1 4
Total 6 12 35 53
Chart showing relationship between type of risk covered and Mode of payment
2 2 2
0
4 4
1
3
12
16
6
1
0
2
4
6
8
10
12
14
16
18
Cash in
Advance
Letter of Credit Bill of
exchange/
Draft
Open account
Free of Damage insurance
Fire and sea perils
All risk insurance

34 | P a g e
Interpretation:
 All risk insurance is taken mainly by those who prefer letter of credit as payment mode
and they prefer fire and sea peril risk coverage less.
 While all those who prefer cash in advance also mainly prefer all risk insurance and they
do not prefer to cover only named or fire and sea perils.
 While opening an account and bill of exchange are risky payment modes and hence they
also prefer all risk insurance.
3. Between currency preferred and mode of payment
Mode of payment Currency preferred Total
Indian Rupee Us Dollar Euro Pound
Cash in Advance 8 8 4 2 22
Letter of Credit 11 12 3 3 29
Bill of exchange/ Draft 3 4 3 1 11
Open account 2 2 0 2 6
Total 24 26 10 8 68
Chart showing relationship between mode of payment and currency preferred
8
11
3
2
8
12
4
2
4
3
3
0
2
3
1
2
0 2 4 6 8 10 12 14
Cash in Advance
Letter of Credit
Bill of exchange/ Draft
Open account
Pound
Euro
Us Dollar
Indian Rupee

35 | P a g e
Interpretation:
 If currencies of exports are US dollar and Indian rupee then exporters will prefer cash in
advance option. While if it is euro or pound cash in advance option is less preferred.
 And payment mode is through letter of credit then exporters prefer Indian rupee or US
dollar. While in case of bill of exchange and opening an account as a mode of payment
then here no preference is visible for any particular currency.
4. Between type of risks covered and currency preferred
Type of risk Currency preferred Total
Free of Damage insurance 3 3 0 0 6
Fire and sea perils 8 8 0 2 18
All risk insurance 10 10 4 3 27
Total 21 21 4 5 49
Chart showing relationship between type of risk covered and currency preferred
3
8
10
3
8
10
0 0
4
0
2
3
Free of Damage insurance Fire and sea perils All risk insurance
Type of risk covered and currency preffered

36 | P a g e
Interpretation:
 Those who are taking All risk insurance mainly prefer to deal in Indian Rupee or Us
dollar while only 7 exporters which consists of 13-14 % of the all risk insurance taker
prefer to deal in Euro or Pound.
 While all those who are taking fire and sea peril insurance are also taking or preferring
Indian rupee or US dollar.
5. Between Mode of Payment and frequency of exports.
Mode of payment How often do you export in a year? Total
1-3 times a
year
4-6 times a
year
7-9 times
a year
10 or more then
10 time a year
Cash in Advance 1 6 5 4 16
Letter of Credit 0 9 8 2 19
Bill of exchange/ Draft 0 2 5 1 8
Open account 1 1 1 1 4
Total 2 18 19 8 47
Chart showing relationship between mode of payment and frequency of exports
1
6
5
4
0
9
8
2
0
2
5
11 1 1 1
0
1
2
3
4
5
6
7
8
9
10
1-3 time a year 4-6 time a year 7-9 time a year 10 or more then
10 time a year
Cash in advance
Letter of credit
bill of exchange
open account

37 | P a g e
Interpretation:
 Those who are exporting more than 10 times a year prefer to deal with advance payment.
 While who are exporting between 7-9 times a year prefer to have letter of credit and next
option they prefer are cash in advance and bill of exchange
 While who export 4-6 time a year prefer letter of credit and cash in advance options.
 While there are only two exporters who export less then they time a year and they both prefer
two extreme ends that is cash in advance and open an account.
6. Banking and financial Services are proper * Letter of Credit Cross tabulation
Banking and financial Services are proper Letter of Credit Total
yes No
strongly agree 4 3 7
agree 2 5 7
Neutral 10 4 14
Disagree 3 1 4
Total 19 13 32
Chart showing relationship between opinion about banking and financial services and using
letter of credit.
Interpretation:
Majority of the exporter who believed and agreed that banking and financial system is
good then they relied on letter of credit while those who disagree with banking system’s
4
5
10
33
2
4
1
0
2
4
6
8
10
12
strongly agree agree neutral disagree
Usingletterofcredit
Bankingand financial services are proper
Yes
No

38 | P a g e
3.4. Factor Analysis (Chart and table)
3.4.1. Scree Plot for various Factors
Interpretation of the chart:
 This shows that total 30 dimensions are there but what influences exports can be explained
by 11 dimensions which have values greater than 1.

39 | P a g e
3.4.2. Results of factor analysis
Component Particular Value Dimension
1 Government of India gives good exemption from
Income Tax
.513 Incentives and
liberalization
Government of India gives good concessions on
Import of Inputs which are meant for exports
.480
Do you think development of E-commerce and
information technology has influenced you for
exports?
.529
Custom duties of Destination country are very high .318
You are exporting because local market of
readymade garment has saturated.
.364
Getting Registration cum Membership certificate
(RCMC) is easy
.615
Getting Registered with chambers of commerce is
easy
.402
Sales Tax/ VAT
.572 Political-
legal and
competitive
environmental
changes
You are exporting because competition is increasing
in local market.
.495
Getting Import- export code (IEC ) is very easy .463
Details asked in Packing list are very High .468
3 Banking and financial Services are proper .275 Attractiveness
of country of
destination
Political condition is sound in destination country .595
Packaging Regulations of Destination country are very
high
.552
4 Standard of living of destination country is High .658 Demography
and
accessibility
Per capita income is very High .466
AEPC is able to provide you real-time access to
database
.606

40 | P a g e
Getting Mate receipt is easy .555
5 You are exporting because your garments are out of
fashion in local market
.549 Availability
of
InformationAEPC is able to provide you information about
global tenders and opportunities
.552
Getting bill of lading is easy .611
6 Climate of destination country is influencing you to
export
.667 Pre export
scenario
AEPC is able to provide you good marketing
assistance
.358
7 Government of India gives good amount of subsidies .464 export
procedure and
risks
Exchange Rate fluctuations are very high in case of
exports
.403
Export Procedures are very long and tedious. .463
8 Population of destination country is very large .299 Market
selection
factors
Export licensing Requirements of Destination
country are very high
.581
Excise Duty
.561 Pre-shipment
aspects
Details asked in commercial bill are very high .395
Interpretation
 So if we see results of factor analysis (Dimension reduction), we can say that Nine
variable/ dimensions which influences/ hinders the exports and they are Incentives and
liberalization, Political- legal and competitive environmental changes, Attractiveness of
country of destination, Demography and accessibility, Availability of Information, Pre
export scenario, export procedure and risks, Market selection factors, Pre-shipment aspects
and if we improve on these aspects it cab boost exports of readymade garment.

41 | P a g e
Chapter: 4 Facts and Findings
 Garment export from Surat is mainly to the European Union countries, USA, England
and Russia while very few exporters are exporting to other countries like Sri-lanka.
 Majority of the exporters are exporting more than 7 time a year which means that they
have already some customer base in foreign country because if an exporter is not having
a customer base then they cannot export for more than 7 time a year.
 Many exporters are considering population of the destination country before exporting
because larger the population is, bigger the market it will be. 80% of the exporters
consider population of the destination country.
 Standard of living is also considered by the exporter before exporting and if we see the
countries in which they are exporting are having higher standard of living almost 6 out of
10 exporters considers this factor.
 If we consider per capita income of destination country than half of exporters are
considering that because clothes are the basic requirement of humans and if you are
exporting cheaper clothes then this factor is not worth of considering. So half of the
exporters consider it while half of those do not consider.
 Majority of the customer considers banking and financial services before exporting
because banking and financial services facilitates payment and other transactions, and
majority of the exporters agreed that banking and financial services of their destination
countries are proper because they are mainly exporting in developed countries.
 If we talk about climate of destination country then 70% of the customers have said that it
doesn’t influence them to export. But many exporters agreed that climate influence them
because many of them are exporting woolen clothes.
 Almost 8 out of 10 exporters have said that political stability in the country of
destination is important for them and more stable the political system is, more they
export.
 60% of the exporters have agreed that government of India is giving good exemption
from Value added Tax but 20% of the exporters have said that government of India is not
giving such exemption.

42 | P a g e
 Almost 9 out of 10 exporters have said that government of India is giving good
exemption from excise duty and hence it influence them to export.
 If we talk about income tax exemption then 4 out of 10 exporters are dissatisfied and they
want more exemption from personal or income tax. But 60% of the exporters are
influenced by such exemption.
 Majority of the exporters have said that government is not giving any exemption on
imports which are done to export something. They want that if they are exporting
garment than machinery which they are importing to manufacture garment, should not be
charged any duty and 70% of the exporters are saying that.
 Only 40% of the exporters agree that government is giving good subsidies for garment
exporter and 60% of the exporters are demanding more subsidies.
 Most of the exporters agree that the development of E-commerce have influenced them to
export.
 Majority of the exporters agree that custom duties at port of destination are very high
which many time de-motivate them to export.
 Most of the exporters are neutral about packaging requirement in destination country that
is neither very high nor too low.
 Half of the exporters believe that licensing requirement in destination country is very
high which is hindering factor for exporters.
 97% of the exporters believe that they were influenced to export because they believe that
local has saturated and destination country is a good market for them.
 Majority of the customers have disagreed with the statement that they are exporting
because particular fashion of garment is outdated. So it does not influence them to export.
 Half of the exporters have believed they are exporting because competition in local
market has increased.
 ¼ th of the population of exporter have said that getting import export code is very
difficult while other ½ of the population have said that it was neither difficult nor easy.
 8 out of 10 exporters have said that getting RCMC is not very difficult while 20 % of the
exporters are disagreeing for it.
 Getting registered with chambers of commerce is easy- 4 out of 10 exporters have agreed
on this statement while ¼ of the exporters are not.

43 | P a g e
 Apparel Export Promotion council is not able to provide good marketing assistance is
said by 30% of the exporters while around 40% of the exporters are agreeing to it.
 AEPC is able to provide you information about Global tenders and 62% of the exporters
were neutral about it while only 20% of them have agreed on that.
 1/3 of the exporters have said that Apparel Export Promotion council is able to provide
real time information to exporters while 25% of the exporters are disagreeing to that.
 7 out of 10 exporters have said that details which were asked in packing list are very high
at the port of destination.
 30% of the exporters have said that details which were asked in commercial bills are very
high while remaining exporters are neutral about it.
 If we talk about getting bill of lading than half of the exporters have said that it was
neither difficult nor easy. While 22% have said that it was very easy.
 As far as getting mate receipt is concerned most of the exporters were neutral about it
while only 20% of the exporters have said that it was easy.
 3/5 of the exports have fear about exchange rate fluctuations but 2/5 has disagreed to it
because they might be dealing in Indian rupee.
 7 out of 10 exporters agree that export procedures are very long and tedious.
 No, exporters are asked for certificate of origin at the port of Destination. Only 6.3% of
the exporters were asked for certificate of origin.
 4 out of the 10 exporters were charged for anti-dumping duty.
 50% of the exporters prefer cash in advance option as it is the safest option while 70% of
the exporters use letter of credit to receive payment.
 Back to Back letter of credit, transferable and confirmed is mainly preferred. Other letter
of credit is rarely preferred by exporters. Back to back letter of credit is mainly preferred
by those who export more than one time.
 70% of the exporters prefer to take all risk insurance but depending upon the mode of
transportation or country of the destination.
 9 out of 10 exporters prefer to deal in Indian Rupee and US Dollar.
 Dress and male shirts are mainly exported by exporters. So male garment sector has high
demand in foreign market.

44 | P a g e
Chapter: 5 Recommendations
 Government of India should give incentives to exporter of garment to export in other
countries other than USA, UK, EU etc. so if they give more incentives for other market than
we can cater to more markets.
 Most of the exporters are exporting 7-10 times a year so procedures should be made so
liberalized so that one exporter will require less time for particular shipment made for rxports
and hence more exports can be done.
 Incentives should also be given for exporting in those countries which are having small
population size, or low standard of living and it should be backed up by research about
potential of demand for readymade garment.
 Exporters should produce cheaper products for those countries which have less per capita
income.
 If we talk about exemption from excise duty, income tax, value added tax, imports meant for
exports then many exporters were not aware about the benefits which were available and
hence they should create awareness to generate more awareness.
 Government has gradually decreased the subsidy on garments but government should declare
reason also for it because exporters feel that it is the injustice to them.
 E-commerce should be given more emphasis because of e-commerce only geographic
boundries can be removed and more exports can happen.
 If we talk about custom duty at port of destination then exporters should produce at lower
price and government should give more exemption from taxation so that they can sell at
competitive price.
 If we talk about licensing requirement in country of destination than they should export in
those countries which has such requirements are very low.
 Exporters should produce such garment which according to the trends running into the
market and should try to sell those clothes which are out of fashion in local market but still
have demand in foreign market.
 If we talk about getting IEC, RCMC, and getting registered with FICCI- recently government
of India has reduced documentation requirement but government should bring all things
online to make it easier and faster.

45 | P a g e
 AEPC is publishing various information about market in foreign countries and tenders and
other data about exports-imports in various markets and its historical data online so here also
awareness should be created for such services.
 There are standard formats are available for documents in international trade which exporters
should follow for commercial bills and packing lists so as they don’t find export procedures
and documentation very long and tedious.
 Hedging, every exporter should follow to avoid exchange rate fluctuations.
 Most of the exporters should follow cash in advance mode of payment to avoid risks and
letter of credit is more preferable than opening an account or bill of exchange.
 Confirmed, irrevocable and transferable letter of credit is best L/C to deal in international
market. While if we are dealing with same customer than back to back L/C is a best option.
 Exporters should take all risk insurance as far as garments are concerned because they are
mainly transported through marine line and hence risk is more than airway.
 Most of the exporters deal in US Dollar, and they should follow that only because it is the
most accepted currency all around the world.

Export of readymade garment from surat

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