India has made changes in the duty drawback scheme to help boost exports. These industry rates of duty drawback will be effective immediately. New entries in the drawback schedule have been created for cotton yarns mixed with manmade fiber - both grey and dyed. It has also increased the drawback caps in the case of certain manmade fabrics. There is a separate entry for cotton yarn mixed with manmade fibers.

However, in product coverage some clarifications are needed with regard to the classification of some high-valued items like boiler suits and protective wear made of blends containing cotton and man-made fibers.

Duty drawback is a refund of duties on imported inputs for export items. Drawback caps are imposed on several export products with an aim to obviate the possibility of misuse by over invoicing of the export value. Steps have been taken for the smooth implementation of the three per cent interest equalisation scheme. Problems faced initially by some exporters in getting the benefit from their banks have been largely resolved.

Even though Indian cotton textiles products are competitive in world markets, preferential access being given to some of the competing nations like Bangladesh, Cambodia, by major importing countries like the EU, are affecting exports.