Reduced duty rates hit garment export orders

New Delhi, June 7: SEVERELY hit by the reduction in duty drawback rates, garment exporters on Thursday sought six months grace period, saying that advance export orders worth Rs 10,000 crore had been hit and the Government should consult them on the issue. “Exporters, after the Budget, had booked export orders for the next six months anticipating an increase in duty drawback due to the revision in excise duty, but now due to the reduction, exporters will suffer a huge loss on these orders,” Chairman of the Apparel Export Promotion Council Raju Goenka said here.

Speaking to reporters after an emergency meeting with various textile exporters Mr Goenka said the Government should immediately reverse the duty at the old rates, at least for the next six months. “As it is, the garment exports are facing a declining trend in this calender year by an average 15 per cent. This reduction in duty drawback will further affect garment exports,” he said, adding that the orders in hand would either be cancelled or sold at a loss. Future orders would be diverted to countries like China and Bangladesh and other countries, he said.

The new rates have been fixed by the Government, despite the cost data sent by the Council suggesting rates of 21.91 per cent of the Freight on Board (FoB) value for knitted garments and 22.9 per cent of FoB value for woven garments, he said.The duty drawback effective from June 7 has been reduced to the extent of four per cent in woven and six per cent on knitted garments from the earlier rates.

-- PTI