The new all-India drawback rates for garments are two per cent compared to the 7.7 per cent drawback available till now.
The drawback was seen as one of the key policy support measures toward lifting the industry’s cost competitiveness. The industry feels that with this steep decline in the drawback support, over 7000 small and medium enterprises in apparel exports will be crippled.
AEPC wants the current transition rates to be extended till March 2018 to instil confidence in the sector and also ensure a smooth transition into GST and also for sustaining employment in the sector. The fear is that in the absence of encouraging drawback rates, exports will further witness a sharp decline just ahead of the peak festival season when the industry was expecting recovery.
Meanwhile the recent high growth of foreign direct investment in the Indian textile sector has boosted confidence levels in the textile industry.
The success rate of placements of skilled workforce in the textile sector is now over 70 per cent.
The Rs 6000-crore package is specially aimed at providing support to the textile, apparel and made-up sectors.
The textile sector offers direct employment to over 45 million people and indirectly impacts close to another 20 million households.