Garments Exporters Association demands fiscal relief

11. Compensation for State Taxes and Levies Till GST is implemented

The Government would be only fulfilling its policy announcements that the exporters would be completely insulated from taxes and levies so as “not to export taxes" by providing for payment of 6% of FOB value of exports, which the exporters are being subjected to, as represented to the Government on several occasions.

Garments Exporters Association (GEA) has requested the Government to provide adequate fiscal relief for the garment sector of the textile industry to #

 

12. Pegging Interest Rates to Exporters at 7%

It is strongly recommended that the interest rates for exports, both at pre-shipment and post-shipment levels, should be reduced and capped at 7%. There is also a need to increase Interest rate subvention from 2% to 4% on export credit.  

 

13. Expedite Signing of FTA with EU

With the shrinking export orders from the European Union, we need to be more competitive than others particularly from Least Developed Countries (LDCs), whose garment exports are allowed duty-free entry in European Union without any paying any duties. We, at present, are subjected to pay 12% duty on our exports to EU, before our exports are allowed entry in to EU. This can be substantially reduced if we sign the long pending FTA with the European Union. The earlier we do that, the better it would be for our exports to the European Union.

 

14. Fix US$ Rate Vis-av-vis Indian Rupee

Very high volatility of Indian rupee had serious unsettling effect on exports. The volatility has become sharp, leaving the exporters in a quandary as to what price they should quote for their exports. In fact, exporters tend to lose in either of appreciation or depreciation of Indian Rupee. GEA recommends that the value of US dollar vis-a-vis Indian Rupee should be fixed for exporters, so that they do not suffer on account of volatility of Indian rupee, on which exporters have no control.

 

15.  Removal of Excise Duty on Indian Branded Garments           

The Excise duty on branded garments was imposed at the rate of 12%, which did impact the garment producers and exporters, selling their products within the country. The situation has become much worse in as much as the concession recently extended to Bangladesh garments by way of duty-free exports to India, has proved to be double whammy.

 

Not only the Bangladeshi garments are generally cheaper than Indian garments, but their imports in India without paying any duty has given them a high price edge, upsetting the level playing field for Indian garments. There is no justification whatsoever to keep high Excise duty on Indian garments, since Bangladeshi garments are allowed duty-free entry into the country.  The Excise duty on Indian branded garments should be withdrawn immediately.