Source : Economic Times 14/06/2011
Country named in Executive Order List despite attempts by exporters to convince US authorities. India has been blacklisted for the third consecutive year by the US government for engaging child labour in its garment export industry, raising doubts over future sourcing deals with global brands. The country was named in the Executive Order List despite several attempts by the exporters to convince the US authorities otherwise.
“Henceforth, whenever we engage in business with global brands, we will have to prove we are not guilty,” says Rajendra Hinduja, MD of Bangalore-headquartered Gokaldas Exports, whose clients include Nike, Reebok, Old Navy, Abercrombie & Fitch, Adidas, Diesel and Levi's. With 37,000 employees across 40 units in South India, Hinduja foresees “huge paperwork for Indian apparel exporters in days to come.”
A mention in the Executive Order 13126 List would throw challenges for the $11.16-billion Indian garment export industry as sensitive Western consumers are known to boycott goods that are produced in sweatshops. “With the US having issued a formal statement on child labour, brands would be made accountable for their trade with India. They would be given a cautious notice by the US specifying they must do due-diligence before engaging in trade with India,” Hinduja reasons. India contributes 3% to global apparel trade and gets 30% of its business from US consumers. The Executive Order List bars the tainted countries to engage in trade with the US Federal government in the sectors concerned. The current list was published by the US Department of Labour on May 31, 2011. The industry believes the whistle blowers are unable to differentiate between the domestic industry and exporters. While the saree and zari units catering to the Indian market employ child labour, it is the apparel export industry that gets a bad name, exporters say.
The industry apex body, Apparel Export Promotion Council’s, defence before the US last month was perhaps too late to salvage the situation. The US had raised doubts over a report mentioning four child labourers were found working for the apparel exporting industry that employs 6.7 million people.
“Forget engaging in trade with the US government, being labeled as a child labour employing industry would cause serious impediment to our future business,” says Sudhir Dhingra, the CMD of Orient Craft, an exporter who has 26,000 workers on roll across 23 facilities in NCR and Rajasthan. His clients include the likes of GAP, Banana Republic, Marks and Spencer, Next and Tommy Hilfiger. “I have seen my clients increasing their surveillance on my factories ever since Indian garment industry made news for the wrong reasons. The brands have deployed independent agencies to monitor us. Every week at least three brands come and visit our factories and talk to my employees, taking stock of working conditions, overtime and forced labour,” says Dhingra who recorded a turnover of . 1,000 crore last fiscal. “While our regular clients respect us for our compliance, it would be difficult for the Indian exporters to bag new orders after being labeled by the US,” he says. AEPC chairperson Premal Udani could not be reached immediately for his reaction.