The revised duty drawback rates are expected to boost textile and apparel exports from India, in particular exports of cotton textiles and other products in the value chain. The removal of drawback cap in the case of export products where the drawback rates are less than two per cent will benefit cotton textile exporters.

There is a significant increase in drawback rates for cotton made-ups which will encourage exports of value-added products like home textiles. The increase in the duty drawback rates would help exporters face the competition in the overseas market. The maximum increase of drawback rates on manmade fiber textiles is by about 1.5 per cent. Also, nylon filament yarn (dyed) has been added under the drawback scheme.

Global markets have turned favorable for Indian exporters because of China’s decision to reduce activities in the labor and energy-intensive industries, including textile and apparel. China has reduced its global market share in the textile and apparel segment to 38 per cent from over 40 per cent nearly two years ago.

India’s textile and apparel exports are expected to reach $82 billion by 2021. The country’s textile and apparel exports grew two per cent in April to October 2018.