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Textile Industry put in a corner by Govt; Revenues may shrink if duty drawbacks rates are reduced

Textile exporters are delaying finalising their orders in the international market due to uncertainties regarding the applicability of duty draw back scheme to them, Mr P Nataraj, Chairman of Southern India Mills Association said.

The government has not yet given the mandate to the Duty Drawback Committee to recommend the revised duty drawback rates and ROSL (Rebate of State Levies). The Government had extended the benefits only up to September 30. As there is uncertainty in the rates of benefits, export booking is getting delayed,” he said.

Textile exporters need 60-75 days to ship the goods from the time they confirm the orders. If there was a delay in finalising orders, they would be unable to ship on time.

Countries such as Bangladesh and Vietnam have trade agreements with the EU and the U.S. and have close to a 10% cost advantage over Indian garment exporters because of nil import duty.

India can be competitive only if duty drawback and export benefits are continued. Textile exporters might not register growth if the duty drawback rates are reduced, he said.

The industry had given its suggestions to the Government on the rates. “We expect that the benefits given to exporters now are continued without reduction,” he said.

The Union Government should extend the export benefits till business revived and ensure that the pre-GST export competitiveness of the industry was sustained, he said. The Government should also expedite clearing all the pending export benefits, Mr. Nataraj added.


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