NEW DELHI, Apr 21: While welcoming the ‘positive features’ in
the Annual Supplement to the Foreign Trade Policy(FTP), including two per cent interest rate subvention to readymade garments for a another year, the Garments Exporters Association(GEA) said the government and exporting community would need to walk a long distance to save the garment export sector from a ‘collapse’ triggered by continued recessionary conditions in the West.
GEA President Rakesh H Vaid complemented Minister of Commerce, Industry and Textiles Anand Sharma for maintaining stability and continuity in the Annual Supplement, saying the positive initiatives will boost exports by making them more competitive in the international market.
Mr Vaid said the subvention of two per cent interest to garment
exporters till March 2014 will provide the much needed succour to these exporters, facing a severe demand compression in view of the
dismal recovery in the United States and European Union markets. Exports to these two entities is 80 per cent of the total exports.
The leading garment exporter of the capital said the recovery of the United States market was ‘painfully slow’ and it is difficult to see the light at the end of tunnel in the Europaan Union markets.
Besides, the deep financial crisis in countries like Cyprus had
shaken the confidence of the global community, “It is easy to make businessmen pessimistic than to make the optimistic,” Mr Vaid remarked.
Mr Vaid also welcomed the extension of two per cent ‘Market Linked Focus Product Scheme’ for exports to US and EU in respect of items falling in Chapter 61 and Chapter 62.
He appreciated the provision for Market and product diversification by adding more markets and more products covered by the schemes.
Mr Vaid said the extension of benefit of Zero duty EPCG Scheme to the exporters who have availed benefits under Technology Upgradation Fund Scheme (TUF) was also a step in the right direction.
Mr Vaid commended the initiative being taken to improve quality
and accuracy of foreign trade data and the constitution of the second Task Force on Transaction Cost in International Trade, which was ‘woefully high.’
About the importance of the sector, Mr Vaid said India’s textiles and clothing industry is one of the mainstays of the national economy. It is also one of the largest contributing sectors of India’s exports worldwide.
He said the report of the Working Group constituted by the Planning Commission on boosting India’s manufacturing exports during 12th Five Year Plan (2012-17), envisages India’s exports of Textiles and Clothing at 64.41 billion dollars by the end of March, 2017.
As per recent trade data, textiles and clothing worth 26.82 billion dollars were exported during 2010-11 and 33.31 billion dollars during 2011-12.
Mr Vaid said the EU market during the calendar year 2012 affected severely India’s T&C exports to the region. The EU textiles market witnessed a negative growth of 13 per cent during the calendar year 2012, resulting in a 2.3 billion shortfall of India’s T&C exports to EU during the Calendar year 2012 over 2011. He noted that the textiles industry accounts for 14 per cent of industrial production, which is four per cent of GDP; employs 45 million people and accounts for nearly 11 per cent share of the country’s total exports basket.
Mr Vaid said the Current Account Deficit(CAD) was going through
the roof and this needed a much bigger push to exporters. Noting that garments were a significant proportion of the total exports, Mr Vaid appealed to the government to announce further steps to boost the sagging exports.
‘We understand the revenue compulsions of the government, but the industry needs a much bigger boost, haunted by the fears of death,’Mr Vaid added.
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