India has clarified that programs such as the Export Promotion Capital Goods Scheme offered to exporters are not subsidies.
These are given mainly to equalise the costs incurred by the industry with international costs and to induce adoption of better technology.
The US had challenged these schemes at the World Trade Organisation.
Industries face high logistics costs and state levies and these are not reimbursed. Schemes such as the Merchandise Exports From India are to offset these costs.
Total textile exports this financial year are expected to be about 40 billion dollars, almost the same as last year. But there are several reasons that are affecting exports such as contraction of international demand.
Apart from investments in the spinning and ginning segments, investments of more than Rs 30,000 crores happened in the last three to four years across the value chain under the Technology Upgradation Fund Scheme.
With the special packages announced for made-ups and garments, five lakh to seven lakh new jobs (direct and indirect) have been created.
Exports of value-added products such as garments, made-ups and technical textiles could help in pulling up the downstream segments of textiles and India is encouraging investors to invest in these sectors.