Texprocil urges govt to extend higher export benefits

23 Aug '14

3 min read

The Cotton Textiles Export Promotion Council (Texprocil) has made an appeal to the Ministry of Commerce and Industry, Government of India, to extend higher export benefits to the textile and garment industry under the forthcoming Foreign Trade Policy.

With regard to the various schemes under the Foreign Trade Policy 2009-14, the textile industry deserves the highest incentives for exports, compared to all other manufactured product exports, if the stated policy objectives on incentives enunciated by the Government are strictly followed, Mr. Manikam Ramaswami, chairman Texprocil, said in a statement.

It is a fact that the textile and garment sector creates several times more employment per rupee of exports than most manufactured goods, Mr. Ramaswami said. He added that the sector has almost 100% net foreign exchange earned while consuming India made/grown raw material. Moreover, the sector also operates with very low profits in a highly competitive market while suffering the highest percentage of FOB value for transportation costs.

In its representation to the Indian Government, Texporcil stressed that unlike many manufactured items that enjoy very high profits and are not susceptible or influenced by the percentage of incentives, textile and clothing exports get impacted even if the rupee appreciates by 3 or 4 percent and is therefore critically dependent on the quantum of incentives to ensure export competitiveness.

Texprocil chairman mentioned that in the current situation the export benefits granted to the textiles sector are very low ranging from zero to 2 percent for yarns, and 3–5 percent for fabrics and made-ups. Against this, there are many items like telephone equipments, radio equipments, mobiles, etc. which enjoy 5 percent Duty Credit Entitlements, while items like tricycles, set top boxes, video games, etc. enjoy 7 percent Duty Credit Entitlements (including bonus).

If the Government reallocates the limited resources available for export promotion as per the stated policy, Indian textile and apparel sector can substantially increase its exports and create several thousand additional jobs in the process, according to Texporcil.

“The statements frequently made that export incentives will favour labour intensive activity are regrettably totally untrue and the stated policy is not being followed while fixing incentives,” said Mr. Ramaswami.

In view of the tremendous potential of the textile and clothing industry to generate employment and promote inclusive growth, Texprocil appealed to the Ministry of Commerce and Industry to extend more benefits to the industry under the forthcoming Foreign Trade Policy.

With membership of around 3,500 companies spread across major textile clusters spread across India, Texprocil facilitates exports of cotton textiles from India.

Fibre2fashion News Desk - India

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