The cost of polyester fabric will fall significant due to reduction in import duty on polyester fibres and intermediaries, industry sources said. The duty cut was announced by the government on Thursday.
The customs duty on polyester fibres and intermediaries would be trimmed to 5% from the present 7.5% and that on man-made fibres to 5% from 10%. Also, the government provided a subsidy to banks for lowering lending rates by 2% for firms exporting textiles and ready-made garments.
?These two steps will definitely help Indian exporters fight with the dollar havoc. It will allow exporters like us to compete with other countries in European and American market,? Kailash Agarwal, MD, Anjani Synthetics Ltd, said.
The 2% reduction of interest rate will definitely reduce the cost of the product. I think the cost of polyester fabric will be reduced significantly, he said.
The government has also taken some major steps like abolition of service tax on exports, hiking drawback rates and reduction in export interest rates.
?I don?t think now any further steps are needed to boost export particularly, in textiles sector,? he said.
All categories of textiles under the existing scheme including readymade garments (RMG) and carpets excluding man-made fibre and handicrafts would get additional subvention of 2% in pre-shipment and post-shipment credit over and above the two per cent extended earlier.
?Reduction of bank rate is really a welcome move but we expect banks to pass these benefits to the industry. As far as ready-made garment exports are concerned, our major exports are of cotton-based garments and the government announced measures for polyester items. So, there will not be any material impact on cotton garments segment of the industry, Premal Udani, Kaytee Corporation Pvt Ltd said.
The government would also exempt storage and warehousing services, specialised cleaning services (fumigation and disinfection) and business exhibition from service tax.