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Cotton yarn price rise, intermittent supply problems: TEA

17
Feb '21
Pic: Shutterstock
Pic: Shutterstock
The rise in cotton yarn prices and intermittent supply of cotton yarn in the past two months have affected small exporting units in Tiruppur, according to the Tiruppur Exporters Association (TEA), which recently, in a letter to finance minister Nirmala Sitharaman, said lack of trade pacts with major importing countries and regions is also a dampener.

There is a lack of a level-playing field due to non-existence of free trade agreements with the European Union, the United Kingdom and Canada, whereas competing countries like Bangladesh, Vietnam, Cambodia, Sri Lanka, Pakistan, Myanmar are now enjoying duty-free status in these markets, the letter said.

“We apprehend that the crisis will lead to a snowball effect, affecting all stakeholders of the knitwear garment sector,” the letter said. TEA requested the minister to announce without delay the rates of the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP).

Some exporting units, mostly micro, small and medium enterprises (MSMEs), have been classified as ‘risky exporters’ due to various reasons and these units are deprived of drawback and also pending RoSCTL benefits. As the verification procedure and clearance after submitting the requisite details take a longer period—in some cases more than a year as well—TEA requested the minister to advice the department to complete the process quickly.

Readymade garment exporting units, after obtaining the export performance certificate (EPC) from Apparel Exports Promotion Council (AEPC), have been importing items like fasteners, buttons, zippers, sliders, pullers, eyelets, rivets, laces, badges, stones, velcro tape, beads for embroidery and stud, without paying customs duty.

The latest budget has imposed basic customs duty for import of these items with effect from April 1 this year. To main competitive edge, TEA requested Sitharaman to reconsider the amendment made and allow import of these accessories without payment of customs duty.

The trade body also requested the minister to permit extension of Interest Equalisation Scheme for another three years, which will help the MSME exporting units to work out their costs accordingly and strive to take more export orders.

Fibre2Fashion News Desk (DS)


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