Textiles industry
is facing still competition from foreign textile industry including our
neighbouring countries especially from Bangladesh, Pakistan and Sri Lanka as
these countries are taking advantage of unilateral tariff preference scheme
granted to developing countries. India, which was also a beneficiary of
the EU GSP has been graduated out of the GSP from 01.01.2014 for textiles and
some other products. The graduation out of countries is done by the EU based on
the criterion of trade share. Hence Indian exporters of textiles pay the normal
customs duty of upto 8% on textiles products being sent to EU from 01.01.2014
onwards. Sri Lanka is covered under a preference scheme of the EU namely GSP.
Bangladesh and Pakistan are covered under other unilateral preference scheme of
the EU namely the “Everything but Arms (EBA)” and the “GSP Plus” respectively.
Hence, they have zero duty access for textiles products into the
EU. China’s manufacturing base in Textiles is larger than India
both in terms of yarn and fabric providing opportunities for higher garment
manufacturing and exports. China has large and strong Infrastructure to meet
global demand of Textiles and Clothing.
The Government has
undertaken research and studies on various facets of textile industry including
estimating the domestic household market size of textiles, export
competitiveness analysis of the Indian textiles in different export
destinations of the world.
The details of
various measures taken by the Government to improve textile export and
competitiveness of Indian textile industry and in order to explore new markets
for textile exports along with steps taken by Government include:-
i) Government has
implements several export promotion measures including incentives under Focus
Market Scheme and Focus Product Scheme; enhancing the coverage of Market Linked
Focus Product Scheme for textile products to increase India’s share in various
countries. Focus Market Scheme (FMS) offsets high freight cost and other externalities to select international markets
with a view to enhance India’s export competitiveness in these markets.
Further, to incentivise export of such products which have high export
intensity / employment potential, so as to offset infrastructure inefficiencies
and other associated costs involved in marketing of these products, Govt.
implements Focus Product Scheme. In addition, Market Linked Focus product
scheme (MLFPS) incentivises export of products that have high employment
intensity in rural and semi urban areas, to offset infrastructure
inefficiencies and other associated costs involved in marketing of these
products.
ii) Financial Assistance is being provided for export promotion activities on
focus countries and focus product countries under Market Access Initiative
(MAI) Scheme.
iii) Financial Assistance is provided under Market Development Assistance (MDA)
Scheme for a range of export promotion activities implemented by Textiles
Export Promotion Councils on the basis of annual action plan.
iv) 2% Interest Subvention Scheme on rupee export credit was available to
certain specific export sectors including Handicrafts, Carpets, Handloom and
Readymade Garments up to 31st March, 2014.
v) Duty Drawback
Scheme: Duty Drawback is the rebate of duty chargeable on imported material or
excisable material used in the manufacturing of goods in and is exported. The
exporter may claim drawback or refund of excise and customs duties paid by his
suppliers.
vi) The Export Promotion Capital Goods (EPCG) scheme is one of the several
export-promotion initiatives launched by the government in the early '90s. The
basic purpose of the scheme is to allow exporters to import machinery and
equipment at affordable prices so that they can produce quality products for
the export market.
vii) Guarantees to
Banks: Packing Credit Guarantee: Timely and adequate credit facilities at the
pre-shipment stage are essential for exporters to realize their full export
potential. The Packing Credit Guarantee of ECGC helps the exporter to obtain
better and adequate facilities from their bankers. The Guarantees assure the
banks that, in the event of an exporter failing to discharge his liabilities to
the bank, ECGC would make good a major portion of the bank's loss.
viii) Advance License:
Advance Licence Scheme allows duty free import of inputs which are physically
incorporated in export product with normal allowance of wastage on the basis of
SION (Standard Input Output Norms). It has export obligation attached to
it which should be fulfilled in 18 month from the date of release of advance
licence.
ix) Increase in entitlement for import of trimmings, embellishments and other
specified items - To encourage exports of readymade garments it has been
announced in Union Budget 2014-15 to increase the duty free entitlement of
garment exporters for duty-free import of trimmings, embellishments and other
specified items from 3% to 5% of the value of their exports.
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