Reduction of customs duty for man-made fibre and the additional subvention for packing credit will help the industry, but only in a limited way, PD Patodia, chairman, Confederation of Indian Textiles Industry (CITI) said.
Welcoming the relief package announced by finance minister on November 29 for the textile sector, Patodia said that in the case of packing credit since a cap of 5% has been stipulated, most units will get less than 2% subvention in practice.
CITI?s request for reducing import duty on cotton to 5% has not been conceded.
Rahul Mehta, president, the Clothing Manufacturers Association of India (CMAI) also stated that over 80% of the apparel exported from India are made of cotton fabrics and the relief announced by the government would not help the garment exporters.
?We must be encouraged to export our apparel from India and not the duties along-with it,? said Mehta.
Mehta has stated that the major relief required from the government to help the industry is to refund the state-level duties which amount to approximately 6% of the FOB value.
Patodia has requested the government that the state level duties at 6% may be refunded to exporters through drawback route or through duty-free scrips.
A request had also been made to declare a moratorium of one year for repayment of principal amounts against all term loans taken by textile and clothing industry so that cash flow of the units could be improved in the short-term and the possibilities of loans turning to NPAs could be avoided, he said.