India's apparel exports have been declining for the last two consecutive years mainly on the back of rise in the cotton and cotton yarn prices.
The government has also reduced duty drawback from 8.8 per cent to 7.5 per cent and withdraw 2 per cent focus market scheme to US beyond October 1, 2010, to March 2011.
With a view to enhance the export-competitiveness of the Indian textile and garment industry, mitigate the impact of above constraints and current economic scenario Apparel Export Promotion council has recommended the following:
Eliminate MAT under DTC and extend tax incentives under 10A/10B of Act.
Extend a deduction of 150 per cent of the expenses incurred on in-house Research and Development facility in respect of companies engaged in the business of manufacture or production of any article specified in the Eleventh Schedule beyond FY12.
Continue the popular DEPB (Duty Entitlement Pass Book) Scheme even if GST is implemented.
Restore Duty Draw Back rate for garments and extend it to accessories of garments also. It is also submitted that the Drawback caps in the Drawback schedule should be removed in order to boost the textile exports from India.
Extended to the additional benefit of 2 per cent interest rate subvention for pre-shipment credit, at par with sectors like silk carpet- toy and sports goods, leather products, etc.
Reduce Custom Duty for the import of motor fitted textile machinery Under EPCG scheme from 10 per cent to 5 per cent.
Under Focus Market Scheme, 1 per cent scrip is available to status holder exporters. However, this is not available to those exporters who are using TUFS. So delinking of TUFS from 1 per cent scrip to status holder will help the industry to gain more.
Extend 2 per cent Market Focus product scheme for exports of garments to US along with EU.
Disincentivize cotton and yarn export or calibrate exports of cotton yarn so as to allow growth in the domestic consumption.