To create such facilities, the council also seeks a number of incentives such as 100 per cent depreciation in the first year of setting up of such units, duty-free imports of machinery, sales tax and income tax exemption and grant of interest-free loans up to 50 per cent of the investment payable in easy instalments only after three years of the start of the production.

Only a few modern textile mills have adequate processing facilities for fabrics, but they are not keen to make fabrics available to garment exporters since such supplies, though regarded as deemed exports, do not qualify for 100 per cent tax deduction under the Income-Tax Act, 1961. They therefore either prefer to export fabrics or the final product.

After the scrapping of thespecial value-based advance licence scheme for garments two years ago, the council has been urging the government to permit exporters to source imported fabrics at international prices. But the government has turned down such a proposal.

Meanwhile, garment exports posted a growth of 19.67 per cent in value and 15.1 per cent in quantity during January-February 1999 over the corresponding period of 1998. This trend indicates a recovery of exports, hit by demand recession in the industrialised countries.

To the US, 635 lakh pieces valued at $342.1 million were supplied during January-February 1999, an increase of 31.2 per cent in quantity and 23.64 per cent in value.

Exports to the European Union were valued at $434.6 million involving a quantum of 1518 lakh pieces. This shows an increase of 12.53 per cent in volume and 14.46 per cent in value. Exports to all the EU member-states had registered an increase compared to January-February 1998. In the case of Canada, these exports had recorded a substantialincrease of 28.95 per cent in quantity and 19.09 per cent in value. Total quantum of supplies was 147 lakh pieces valued at $44.3 million.

Exports during April-February 1999 were valued at $4767.6 million, showing an increase of 7.10 per cent over the previous corresponding period. Those to the US increased by 14.51 per cent to $1478.8 million.