The Hindu Business Line : SIMA hails EPCG incentive proposal in trade policy

TEXTILE units availing themselves of export promotion capital goods (EPCG) will be happy with the incentive being conferred on those who meet a higher rate of export obligation fulfilment under the EPCG announced in the foreign trade policy by the Commerce Minister, Mr Kamal Nath.

The incentive of freedom from the balance export obligation for industries which could achieve 75 per cent or more of exports in half or less than half of the original export obligation period prescribed under the EPCG should augur well for the textile mills as many of the units in the industry fulfilled the objectives much earlier than the envisaged period, said the Chairman of the Southern India Mills Association (SIMA), Mr Vijay Venkataswamy.

The SIMA chief, however, felt that unwillingness on the part of the Government to remove the maintenance of the average level of exports clause would be a cause of worry for the units in the domestic tariff area.

These units, which were exporting more than 75 per cent of their production, were finding it difficult to maintain the average level of exports owing to fast changing market dynamics.

At the same time, the foreign trade policy pronouncements such as the developing a trademark for handloom, decision to continue with the DEPB scheme in the existing form and an assurance to look into exporters' problems relating to taxation on profits on sale of DEPB scrip would prove to be timely relief.

So also is the proposal to set up an inter-State trade council, which gives fresh hopes to the exporting community that the various levies paid by it would be reimbursed, he added.

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