New Delhi: Garments Exporters Association has criticised the government for making frequent mid-term amendments in the five year long-term garment quota policy and demanded a `White paper' on the quota policy at the earliest.`The New Investment Entitlement (NIE) quota, which was earlier only for the garment manufacturers, has now been extended to include stand alone units and textile mills who do not manufacture garments and have their own quota under the Cotton Textile Export Promotion Council," chairman of the GEA Rakesh Vaid said.The ministry of textiles should come out with a white paper specifying the reasons behind the sudden mid-term changes which included a first time provision of allowing `carry foward' of the allotted quota to the next year, he said.
Vaid said that as a result of the option given for carry forward, many of the non-garment units have surrendered 50 per cent of their allocated quota which cannot be utilised until next year. "Most of the surrendered quota belongs to the fast moving prime category meant for the US market. Already, quota for 22 lakh pieces of the ladies blouses and men's shirts for the US have been surrendered by the textile mills," he said.
As a result of inclusion of non-garment units and mills under the NIE quota around Rs 3,000 crore worth of exports are being diverted, he said adding that mills account for 10 per cent of the NIE quota. "Over 1.5 crore pieces have been diverted to the mills which will now sell them as third party shipment to the genuine garment exporters," Vaid said.
Vaid said that almost two-thirds of the garment exports come under the quota and this diversion would affect almost 10 per cent of the growth targeted during the current financial year.
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