Demanding a package more specific to the textile sector, the Clothing Manufacturers Association of India has asked for a further two per cent interest subvention, removal of income tax on exports, an increase in duty drawback rate and changes in the labour law.
"We sent a proposal to the ministry of commerce and industry and the PMO a week ago requesting a specific package for the textile sector," Clothing Manufacturers Association of India president Rahul Mehta told PTI.
"We've asked for an increase in the duty drawback rate and a further two per cent interest subvention," he added.
The Centre, in a stimulus package on December 7, provided an interest subvention of two per cent up to March 2009 for pre and post-shipment export credit for labour-intensive exports (textiles, leather, marine products) and SME sector.
Mehta said they are also 'seeking reintroduction of Section 80 HCC in the Income Tax Act for a short period, by which exports can be made income tax free' and gain leverage in the global market in terms of competitiveness.
He, however, said they haven't estimated as to how much this step, if implemented, would cost the exchequer.
"The two stimulus packages mean nothing for the Indian retail or apparel industry," Mehta said, adding they haven't proposed an amount for the package they are looking at.
"The question of positive growth can be ruled out. Our estimates show that exports in October were negative at eight per cent and for November, it was at 12 per cent. December is likely to show flat or negative growth," he said.
Mehta said payments from retailers, both domestic and overseas, have slowed down and the percentage of orders have also taken a dip.
"The situation is very grim at the moment. There is fear that the amount of job losses may reach a million (from 500,000 jobs lost till November) till March-April," Mehta said.
Asked if he expects US President Barack Obama's administration to bail out the US economy, a major market for Indian textiles, he said, "There is a possibility of a psychological boost, an improvement in consumer sentiment and that will bode well for us."
