Textile industry wants export benefits on all products

Himanshu Vatsa | The Dollar Business

Days after the government announced a revised list of textile products eligible for benefits under Merchandise Export from India Scheme (MEIS), industry leaders said that excluding knitted fabric from the list will have adverse impact on the country’s exports. In a fresh notification issued on July 16, the Directorate General of Foreign Trade (DGFT) revised the list of textile products and countries importing those products from India for giving credit benefits to exporters. As per the revised list, textile items shipped to European countries like Norway, Switzerland, Iceland and Liechtenstein will be eligible for duty credit scrip up to 5%. The fresh list also included exports of fabrics – both woven and knitted traded under various HS codes— to Bangladesh and Sri Lanka for 2% credit benefits. The new norms came in to effect from July 14. However, the new list does not include value-added items like knitted fabrics under MEIS scheme. Exporters say that such a move will have negative impact on their competiveness in the global market. “We will have to rethink the entire marketing plan. The cost of Indian products will go up in the international market and competition will increase,” Pratik Singhal, proprietor of Pratik Prints— a Gujarat-based export house— told The Dollar Business. Indian knitted fabrics, especially those made up of lycra, find many buyers in garment manufacturing hubs like Bangladesh and Sri Lanka. But suppliers of such raw material from China and Pakistan pose major threats to Indian exporters. “We are already facing tough competition from countries like Bangladesh, China, Sri Lanka and Pakistan. Their products are much ahead of us in terms of design. Also, exporters from these countries can offer competitive prices because they get enough support from their respective governments. We need additional support from the government to be competitive in the global market. Even the existing schemes are not adequate,” Singhal said. RK Dalmia, Chairman of the Cotton Textiles Exports Promotion Council (Texprocil), also said that the MEIS list should cover the entire range of products including knitted fabric and other value-added items like dyed and printed fabrics and made-ups. This will encourage small entrepreneurs involved in textile industry across the country.    

July 21, 2015 | 3:52 pm IST.