The Tirupur Exporters' Association (TEA), knitwear/readymade garment hub in the country, has requested the Union government to immediately announce the revision in all industry rate of duty drawback for the garment sector.
The Tirupur Exporters’ Association (TEA), knitwear/readymade garment hub in the country, has requested the Union government to immediately announce the revision in all industry rate of duty drawback for the garment sector.
In its letter to the Union finance ministry, TEA sought the revised duty to be around 4.5% as against the current 2%, given the volatile market conditions. Raja M Shanmugham, president, TEA, said all industry rate of duty drawback usually announced in September/October have not been announced this year. It seems the Union government has been delaying the announcement since rupee has depreciated against dollar.
After softening of crude oil prices, rupee has been in the declining trend against dollar, from peak value of Rs 74.35 per dollar on October 10, 2018, to Rs 69.60 versus dollar. The trend will continue in the coming days, he pointed out, adding the benefit of rupee depreciation has been short-lived and the knitwear exporters are already feeling the pinch of it.
According to him, in the first half period of the current financial year, the total knitwear exports from India has recorded Rs 26,056 crore, against Rs 29,210 for the corresponding period in the previous year, a decline of 10.8%.
While calculating knitwear exports from Tirupur for the same six months period reveals that exports have declined from `13,600 crore to `12,100 crore, a decline of 11%.
After implementation of the goods and services tax (GST) in the garment sector from October 2017 onwards, only after one year, i.e in October 2018, the exports have clocked positive figure compared to the previous year.
While welcoming the Union finance ministry for the Reserve Bank of India (RBI) announcement of increasing the interest equalisation rate from 3% to 5% on pre- and post-shipment export rupee credit from November 2, onwards, the association is appealing to the ministry to immediately announce the revised all industry rates of duty drawback for the sector by increasing from 2% to 4.5% and help it to overcome the crisis and enhance exports including employment.
The association also made a similar plea to the Union textile ministry, he added.