In a dramatic move, the government has withdrawn the 7.61 percent concession given to cotton yarn exporters under the Duty Entitlement Pass Book (DEPB) scheme, in a bid to rein in the prices of the textile product, which has shot up abnormally in recent months, which has exasperated the apparel exporters.
This was purportedly done on a request from the Textiles Minister, Mr Dayanidhi Maran, who had written letters to the Finance and Commerce Ministries, to implement urgent measures to control the spiraling prices of cotton yarn and also due to widespread pressure from clothing exporters.
At the same meeting where the decision to suspend the DEPB scheme was taken, it was also decided to impose an additional duty or cess on exports of raw cotton and cotton yarn, the duty which is to be formalized by a committee of officials drawn from different ministries.
Knitwear exporters have been protesting against the unusual hike in cotton yarn prices, which have increased by nearly 30 percent in the last few months, with the latest hike being implemented on April 1, in protest against which, the Tirupur exporters had even gone on a token fast.
As it is, garment exporters have been badly hit by the slowdown in global markets. Latest figures available indicate that, apparel shipments have fallen to US $7.92 billion in the period April 2009 to January 2010, against $8.81 billion in the same period of the previous fiscal, to post a decline of 10.16 percent.
Fibre2fashion News Desk - India
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