May 23, 2017 2:34:06 am
The government has trimmed the textile and clothing export target to $45 billion for the current fiscal. Total shipments in the last fiscal missed the initial target of $48.5 billion by a huge margin.
The target for 2017-18 will nevertheless represent a 17 per cent rise from the actual level of $38.6 billion in 2016-17, according to provisional official estimates. While garments exports witnessed a marginal rise from the year before, textiles exports dropped in the last fiscal. In 2015-16, the overall textile and garment exports were to the tune of $40 billion.
The exports were way off the target in the last fiscal, as demand from China — especially for cotton and yarn — was tepid and recovery in the developed markets like the US and the EU still remained fragile. Demonetisation, too, hit the labour-intensive sector, albeit temporarily, as many workers are paid in cash daily or weekly. Stiff competition from countries like Vietnam, Bangladesh and Pakistan— with zero-duty access to some of the key markets— added to the woes of Indian exporters. Bangladesh, for instance, exports products at zero duty to the US and the EU, which together account for around 65 per cent of Indian supplies.
For its part, the textile ministry has sought a quick resolution of the India-EU free trade agreement, which would pave the way for duty-free access of Indian textile and garment items to the EU, which account for more than a third of the country’s garment exports, official sources said.
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After a Rs 6,000-crore package for the garments sector in June 2016, the textile ministry is planning to come up with another package for the knitwear sector that is struggling to cope with financial stress, resulting in lower productivity than countries like China.
Outlining the achievements of her ministry, textile minister Smriti Irani said: “We will announce a big package for the knitwear industry which is facing several challenges in the next one month or so.” Irani, however, didn’t offer much details on the package. There was no announcement of any time frame for the announcement of the proposed National Textiles Policy.
The minister said that roadshows were held in six countries — the UK, the US, China, Russia, South Korea and UAE — to attract potential investors for the three-day Textiles India event, which will be inaugurated by Prime Minister Narendra Modi in Gandhinagar on June 30.
Rs 1,900 crore approved for RoSL
The government has provided Rs1,900 crore so far for a new duty drawback scheme that was announced as part of a special package for the garments industry in June last year (after the 2016-17 Budget was presented).
For the current fiscal, the government has budgeted Rs1,555 crore for the remission of state levies (RoSL) to the garments industry under the duty drawback scheme.
The government in June last year approved the special package for the garments sector, aiming to create one crore new jobs, additional investments of `74,000 crore and extra exports of $30 billion in three years.
(With Inputs from FE)
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