The RBI recently extended the interest subvention of 2% on rupee export credit to certain manufacturing sectors including textiles. However, in the case of textiles, such a narrow list of eligible products has been included for the facility that it practically negates the benefit of the decision. Only eight products at 8 digit level of HS have been included in the list – that too mostly insignificant products. The decision to exclude most of the products which were earlier getting the interest subvention benefits is regrettable. CITI had taken up this issue with the RBI with a request to immediately review the list and include all textile and clothing products falling under HS chapters 50 to 63 in the list of products eligible for the interest subvention, excluding those relating to fibres. On advice from RBI that the list of products had been finalised by the Ministry of Finance, the issue has now been taken up with the finance Ministry. I hope the list will be expanded immediately, so that the interest subvention can be used by the industry effectively at this crucial time when the export markets are just recovering from a serious downturn.
The Minister of Textiles convened a meeting on 10th August 2010 to consult the industry on the modifications that could be incorporated in the Scheme while restarting sanctions of fresh projects. The meeting was attended by the office bearers of all prominent organisations in the textile and clothing industry and they requested for immediate resumption of sanctions under TUFS in order to ensure that the momentum in modernisation and expansion of the industry could be sustained. I explained that theinvestment needs of capital intensive segments of the industry such as spinning, processing and technical textiles should be addressed appropriately. Textile Minister expressed confidence that the government would allocate sufficient funds under the scheme and a revamped TUFS would be put into operation soon. He was emphatic that this is one scheme which has produced positive results and he will fully support the efforts of the industry for modernisation. Meanwhile, there are reports from the industry that investment plans are being postponed by many because of the uncertainty in the availability of TUFS benefits.
Textile Minister also convened a meeting on 10th August 2010 to consult the industry on National Fibre Policy in order to finalise the draft policy that had been placed on the Ministry’s website. All organisations that had provided comments on the draft were invited to the meeting. I reiterated the comments that CITI had sent to the Ministry earlier and highlighted our view that the proposals for establishing a Yarn Advisory Board, imposing prohibitive export duty on cotton yarn and tightening the norms for enforcing hank yarn obligation were neither part of the Terms of Reference of the Working Group nor connected to fibre policy. I also explained that all data on production, export and import of yarn are readily available with government and therefore, the proposed Yarn Advisory Board would not have any useful role to play either for fibres or for yarn sector. Also, restrictions on yarn exports would be in conflict with the objective of the Policy for improving fibre consumption. The Fibre Policy is expected to be finalised shortly, after taking into account the views given by stakeholders in writing and also in the meeting convened by Textile minister.
Bangladesh had overtaken India in garment exports last year and the same position is continuing this year. A few years back, India had allowed zero duty access for 8 million pieces of garments from Bangladesh. For some reasons, this quantity was not getting utilised in full. However, from this year onwards, Bangladesh is using it in full. A request from Bangladesh to allow zero duty access for a number of HS lines relating to knitted and woven garments is currently being examined by government. CITI has categorically written to government that any concession given to the highly competitive Bangladesh garment industry would critically affect the domestic industry in India, which is mostly in the SME sector. That Bangladesh has been taking extremely hostile measures specifically targeting Indian textile business has also been brought to the notice of government. I can only hope no more zero duty access or tariff concessions will be provided to the garment industry of Bangladesh.
CITI has entered into an MOU with Businessglobal.com for organising a virtual exhibition for Indian textile and allied products. In addition to textiles and clothing, textile machinery industry can also participate in the event which will be available online for the global viewers for a full year and has a nominal participation fee. |
