Package for textiles to benefit the local industry more

Aamir H Kaki

Commenting on the government’s approval for a special package for Textile and Apparel sector, Kripabar Baruah, Deputy Director, The Synthetic & Rayon Textiles Export Promotion Council (SRTEPC), said that this is majorly going to benefit the domestic garments industry compared to exports. 

“The garment makers who are importing fabrics will be given additional duty drawbacks of 5 percent by the government, to promote manufacturing in the country. They are allowed to import almost free of cost under the Advance Authorisation Scheme,” Baruah told The Dollar Business.

He said that the package will definitely generate employment, but mainly in the domestic manufacturing sector, not in the export sector.

“The exports in this scenario are volatile and the profit margin is thin. Therefore, there is a need to focus on the export sector,” Baruah said.

M Mody, Owner R F International, a textile exporting firm based out of NCR, told The Dollar Business, “We are a little skeptical about the actual implementation of such schemes. In the past too, many such announcements have been made but their actual execution have been marred by bureaucratic delays.”

On the additional five per cent duty drawback for garments, Mody said that if the government successfully implemented the announced Rs 5,500 crore (out of Rs.6000 crore) for an additional 5 percent duty drawback for garments, it would benefit the sector in a big way and help in reviving the domestic industry amidst this challenging environment. 

On the other hand, S C Ralhan, President, FIEO said that the special package will meet a few of the outstanding demands of the textile sector and provide competitiveness to exports of textiles from the country.

“The rebate on taxes via the route of duty drawback and awarding of duty drawbacks in case of fabrics import under Advance Authorization would improve the cost competitiveness of exports,” the FIEO chief said in a statement.

“The additional 10 percent TUFS subsidy for garment industry based on additional production will enhance the sector to modernise and enhance the production while creating job opportunities,” he added.

The government on Wednesday declared a special package of Rs.6,000 crore for the textile and apparel sector, with an aim to help in generating one crore jobs in the next three years. The package also includes various tax and production incentives for the sector.