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Special advance authorisation scheme to benefit exporters
10
Sep '16
The special advance authorisation scheme announced by the Centre last month will help garment exporters to compete better with counties like Bangladesh and Vietnam. The scheme allows duty-free import of speciality man-made fabric used as inputs for exports, especially high-end garments, thereby reducing the gap between Indian exporters and their competitors.

Currently, apparel exporters from India pay around five per cent import duty while exporting to the EU, compared to zero duty for exporters from Bangladesh. The new scheme will add up to an additional duty drawback reimbursement of 3.2 per cent to 4.7 per cent, which will help immensely in increasing competitive edge of Indian exporters, according to the Apparel Export Promotion Council (AEPC).

“India has been losing to competition from smaller nations like Bangladesh and Vietnam because of higher labour cost, absence of cluster manufacturing and inability to attract women workforce to reduce labour costs. Banking on trade agreements and low manufacturing overheads, these countries have started to pose a serious threat, especially in the EU and the US,” AEPC chairman Ashok G Rajani told Business Line.

Bangladesh is currently ahead of India in terms of value of clothing exports. In 2015-16, its readymade garment exports were valued at $28 billion, while India's exports stood at $17.1 billion.

The scheme, however, is not likely to negatively impact the domestic industry as the duty-free import is allowed only of speciality man-made fabric and not all man-made fabric. (RKS)

Fibre2Fashion News Desk – India

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