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Government plans corrective measures to boost textile exports

Considering the slowdown in India’s textile and apparel exports growth, the Ministry of Textiles has recommended several measures to improve the situation of the industry. As per the latest figures, textile and garment exports rose 0.6 per cent to almost $18 billion in the first half of the current fiscal from the previous year.

The textile and garment exports target $47.5 billion for 2015-16 with a projected growth rate of almost 14 per cent from a year before. However, the targets are set to be missed as Indian exporters are facing turmoil in global market not only because of the competition but also because of policies that have not rendered positive results. Most exporters, small, medium and big strongly feel that if the government works on improving some areas it will definitely bring positive results.

Some of these are: reduction of excise duty on man-made textiles from 12 per cent to 6 per cent; enhancement of market coverage under the Merchandise Exports from India Scheme (MEIS); upward revision of duty drawback rates as well as value caps; continuation of interest subvention scheme and expanding its scope; and providing working capital at 7 per cent to exporters under priority sector lending.

Of these, the government has taken action on recommendations related to MEIS, duty drawback (rates were raised by 2 per cent for textile products in November) and interest subvention. The Ministry of Textiles realising the potential impact of FTAs, including TPP, where the inclusion of a significant apparel producer, Vietnam, in TPP has the potential to shift global trading pattern, as Vietnam will get duty-free access to the US, Canada and Australia.