With the rising cotton and manmade fibre prices, tariff barriers, delay in disbursement of TUF subsidies, global economic slowdown, and conclusion of regional FTAs, the Indian textile and apparel export industry has been facing a lot of hurdles in competing with other apparel manufacturing countries. To swim out of troubles and level their competitors, the exporters have been demanding extension of additional incentives under Merchandise Export from India Scheme (MEIS) along with 3 per cent subvention for export of all textile products.
Following this fall in exports, the Government of India has extended the 2 per cent export benefit under MEIS allowing the export of fabrics and manmade fibre spun yarns to leading markets such as African countries, middle East countries, Sri Lanka, and Bangladesh. Earlier, the benefit was confined only to countries in Group A and Japan in Group B and Bangladesh & Sri Lanka in Group C for fabrics. In the case of manmade fibre spun yarns, the benefit was earlier extended only to countries in Group A and Japan in Group B. Now the benefit has been extended to all countries in Group A, B & C for both fabrics and manmade fibre spun yarn.
In the case of made-ups and apparels, the benefit was extended to all countries in Group A and only Japan in Group B. Now the benefit has been extended by Government of India to all countries in Group A and B.
Chairman of the Southern India Mills’ Association (SIMA), M. Senthilkumar reacted to the amendment “Cotton yarn also could have been included as the highly capital and labour intensive spinning sector is under more stress when compared to other segments. The relief given to the manmade fibre spun yarn might slightly increase the exports and help the spinning sector to certain extent.” Although the extension of this scheme would bring a sigh of relief for the textile and apparel exporters, the commerce department failed to get the interest subsidy scheme restored that was discontinued last year.
The SIMA Chief has also appealed to the Government of India to announce the interest subvention for all textile products which is being considered since a year.