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GEA calls on Textile Minister to undertake policy reforms

Jun '09
In meeting the serious challenges facing the textile industry in general and garment exporters in particular because of worldwide recessionary trends and low unit value realization from overseas markets, bold textile policies coupled with strong political courage to implement them will be called for in the next few months. A new awareness, and inspiration to invest, to modernize, to produce and export is now in the air with the installation of a stable UPA Government.

We are happy to note the recent press statement that UPA Government will work on creating one crore new jobs in the textiles sector and attract an investment of Rs.1.55 lakh crore over the next five years in the labour-intensive textile sector. The Garment Exporters Association (GEA) extends its full support in the new assignment and in implementing the socio-economic policies that the government would be unfolding with in the framework of the national agenda to increase production, employment and exports.

GEA is confident that the Indian Apparel Industry, one of the most dynamic sectors of the Indian economy will continue to play a very significant role in economic development of the country. The Government of India has recognized the importance of this labour intensive industry as the focus area to meet the challenge of generating more employment during the Eleventh Plan period. According to the recommendations of the working group on HRD initiative for the textile and apparel industry, the textile industry would continue to be largest employment provider in the country after agriculture.

However, to achieve the desired objective of increased employment generation in the apparel industry, large capital investment will have to be made to generate the required employment during the Eleventh Plan period. The sustainable employment potential of the apparel industry will have to be enhanced by taking appropriate necessary action to encourage the required investment by providing a level playing field for the Indian garment exporters vis-a-vis the other garment exporting countries.

Over 95% of the garment exporters belong to the MSME Sector and it would be in the interest of the Government to create polices that would kindle the spirit for growth in these entrepreneurs. Towards this end, GEA would like to suggest the below mentioned key policy initiatives which would automatically gear up the entrepreneur skill of the exporters to add to the national efforts of creating such employment for the weaker section and increase in exports.

Issues relating to Ministry of Finance:
1. To hike duty drawback rates by 5 per cent by increasing the scope and coverage of duty drawback scheme so as to ensure full reimbursement of excise duties, custom duties, service tax, education cess and various state level taxes.
2. To provide adequate and need-based funds to exporters at reasonable rates of interest which should not exceed 7 per cent as applicable to agriculture sector and restore 4 per cent interest rate subvention on export credit upto March 2010.

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