With readymade garment exporters losing competitiveness due to lower rates of export incentive scheme, exporters in northern India have requested the Centre to immediately review the new rates to boost the exports. Last week, the Central Board of Indirect Taxes and Customs (CBIC) slashed duty drawback rates on cotton, man-made and blended garments. The new drawback rates will be effective from December 19, 2018

The duty drawback rates for apparel industry have decreased for most garment categories such as cotton, man-made and blended. In a letter written to the Finance Ministry, the Apparel Export Promotion Council (AEPC) has pointed out the move has come as a setback for the industry which is already losing global market share due to reduced competitiveness after the implementation of GST.

According to industry, around 30-40 per cent of exporters have already started utilising their capacity to cater to the domestic demand. The domestic market is pegged at around Rs 3.25 lakh crore and is almost three times more than the exports market. However, manufacturers having deep pockets can sustain in the domestic market.