Worried about the recent drop in exports of textiles and garments and rise in imports from countries like Bangladesh, exporters have urged the government to come up with more incentives in the forthcoming Union Budget to help the domestic industry stay competitive. The Textile Ministry has already formed a Committee to look into the issues raised by the industry and exporters are hopeful that together with the Finance and Commerce Ministries, help could be given to this sector.
HKL Magu, Chairman, Apparel Export Promotion Council (AEPC) said, garments exports have suffered a huge loss within three consecutive months since October 2017 and hopefully the industry’s problems would be looked into seriously and suitably addressed. “Under the new GST and drawback rules, the reimbursements of taxes for the sector have gone down to the extent of 7 per cent (of the value of exports), whereas an additional incentive of 2 per cent was given to the sector in the foreign trade policy review in December. There is a shortfall of 5 per cent which has to be addressed in the Budget as it is pulling down exporters,” Magu said.
AEPC has sought a number of Budget interventions, which include: more incentives, continuation of duty-free import of speciality fabric up to 1 per cent of export value of garments, 24x7 customs clearance, withdrawal of GST on air-freight and duty-free import of samples. Exports of garments and textiles fell 3 per cent in December 2017 to $2.99 billion, although in the April-December 2017 period it recorded a growth of 2 per cent at $26.13 billion.
What has shaken the domestic industry is the rise in imports in the comparable period. According to CITI, India’s imports of garments from Bangladesh increased 66 per cent to $111.3 million during July- December 2017 as against $66.9 million in the same period last year.