Interviews
'Open up non-food retail to FDI' – CMAI tells govt
21 Feb '12
8 min read
8) Incentives for export of Indian brands:
The Indian textiles and clothing trade has increased rapidly in the last decade and will continue to grow at a fast pace. To protect their competitive position in the near future they will have to export branded clothing by adopting new marketing strategies. Alongside, there is also a need to upgrade the international perception of 'Made in India' products to increase their global acceptance.
It has suggested that the Government should take an initiative to support and encourage domestic brands as is being done in Turkey under the name “Turquality”. The Turkish program contributes financially, administratively and other means to the development of Turkish brands meant for exports.
9) Availability of C-Form:
Considering that manufacturers face difficulty in getting C-Forms, CMAI has proposed that leading trade associations like CMAI should be authorized to issue the forms to all the members of the industry. Ministry of Commerce has already authorized CMAI to issue Certificate of Origin (CoO) to exporters.
10) Introduction of Goods and Services Tax (GST):
Presently there is a system of many indirect taxes levied on goods and services before it reaches the final consumer, which results in higher transaction cost for the consumers, which transform into higher priced outputs, making Indian products uncompetitive in the global markets.
The GST to be implemented is intended to simplify and amalgamate the fragmented tax structure into a single tax by eliminating various indirect taxes. Under it manufacturers, wholesalers, retailers and service providers are entitled to claim credits for the GST paid on their purchase from GST paid to them by their customers.
11) Permitting FDI in non-food retail sector:
The Government recently opened up the retail sector for foreign investors, permitting FDI in single-brand as well as multi-brand retailing, which however was revoked due to protests from kirana stores and farmers, on the perception that they will be exploited once the big retail giants enter the Indian market.
The threat is perceived more in the food sector and till the time agreement is reached at a broader level, specific sectors which are less susceptible to protests can be opened up. Considering the current scenario, CMAI has urged the Government to open non-food sectors for FDI till the time; consensus is reached at the broader level.
12) Exclude garments from Standard Weights and Measures Act and include in list of essential commodities:
CMAI has also requested the government to exclude readymade garments from Standard Weights and Measures Act and the Packaged Commodity Act. It has also demanded a ban on imports of second-hand (worn) clothing, as fresh clothing is being imported in garb of second-hand garments, causing revenue loss to the exchequer and also destabilizes the Indian textile value-chain.
CMAI has also proposed to include garments in the 'List of Essential Commodities' thereby decreasing the tax being levied and increasing the industry cost competitiveness. This exercise will further spare the Government of annual exercises undertaken to determine the rates of duty drawback and DEPB.
The Indian textiles and clothing trade has increased rapidly in the last decade and will continue to grow at a fast pace. To protect their competitive position in the near future they will have to export branded clothing by adopting new marketing strategies. Alongside, there is also a need to upgrade the international perception of 'Made in India' products to increase their global acceptance.
It has suggested that the Government should take an initiative to support and encourage domestic brands as is being done in Turkey under the name “Turquality”. The Turkish program contributes financially, administratively and other means to the development of Turkish brands meant for exports.
9) Availability of C-Form:
Considering that manufacturers face difficulty in getting C-Forms, CMAI has proposed that leading trade associations like CMAI should be authorized to issue the forms to all the members of the industry. Ministry of Commerce has already authorized CMAI to issue Certificate of Origin (CoO) to exporters.
10) Introduction of Goods and Services Tax (GST):
Presently there is a system of many indirect taxes levied on goods and services before it reaches the final consumer, which results in higher transaction cost for the consumers, which transform into higher priced outputs, making Indian products uncompetitive in the global markets.
The GST to be implemented is intended to simplify and amalgamate the fragmented tax structure into a single tax by eliminating various indirect taxes. Under it manufacturers, wholesalers, retailers and service providers are entitled to claim credits for the GST paid on their purchase from GST paid to them by their customers.
11) Permitting FDI in non-food retail sector:
The Government recently opened up the retail sector for foreign investors, permitting FDI in single-brand as well as multi-brand retailing, which however was revoked due to protests from kirana stores and farmers, on the perception that they will be exploited once the big retail giants enter the Indian market.
The threat is perceived more in the food sector and till the time agreement is reached at a broader level, specific sectors which are less susceptible to protests can be opened up. Considering the current scenario, CMAI has urged the Government to open non-food sectors for FDI till the time; consensus is reached at the broader level.
12) Exclude garments from Standard Weights and Measures Act and include in list of essential commodities:
CMAI has also requested the government to exclude readymade garments from Standard Weights and Measures Act and the Packaged Commodity Act. It has also demanded a ban on imports of second-hand (worn) clothing, as fresh clothing is being imported in garb of second-hand garments, causing revenue loss to the exchequer and also destabilizes the Indian textile value-chain.
CMAI has also proposed to include garments in the 'List of Essential Commodities' thereby decreasing the tax being levied and increasing the industry cost competitiveness. This exercise will further spare the Government of annual exercises undertaken to determine the rates of duty drawback and DEPB.
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