India has cut duty drawback rates for apparel exporters. The cut back would likely lead exporters to raise prices to balance the loss of revenue from the refund. Duty drawback rate on garments containing cotton and manmade fiber blends is now 2.5 per cent compared to the earlier 9.5 per cent. Clothing items made of silk are now subject to a rate of 4.8 per cent compared to the earlier 7.6 per cent while the rate on wool apparel is 3.5 per cent from 8.7 per cent.

The Apparel Export Promotion Council (AEPC) wants the earlier rates to be continued till March 31, 2018, to instill confidence in the sector and for sustaining employment in the sector. It says in the absence of encouraging drawback rates, exports will further witness a sharp decline just when the industry was expecting a recovery.

In contrast Pakistan has raised duty drawback rates to promote exports. Half the incentive for eligible textile and non-textile sectors will be given immediately. The remaining 50 per cent of the rate of incentives would be provided if the exporter achieves an increase of 10 per cent or more in exports compared to the corresponding period of last year. An additional two per cent drawback would be provided for exports to non-traditional markets.