The Hindu Business Line : Re rise: Textile sector seeks reimbursement of State levies

The issues
Call for level playing field vis-À-vis neighbouring countries such as China, Bangladesh, Pakistan and Vietnam.
Textile exports likely to miss the target of $25 billion for the current financial year if the downturn continues.

Our Bureau

New Delhi, Nov. 6 Stung by the rising rupee, the textiles and clothing industry has sought a reimbursement of State levies, besides demanding that pre and post shipment credit be made available for the industry at six per cent and the post-shipment credit be extended from the present three months to one year.

Level-playing field

Highlighting the downturn faced by the sector in light of the appreciation of the rupee against the US dollar and other currencies, 11 major textile and industry associations have come together to seek a “level-playing field” as against their counterparts from other neighbouring countries, including China, Bangladesh, Pakistan and Vietnam, where domestic currencies have not appreciated as much as the rupee and infrastructural overheads are not as high as in India.

The rupee has appreciated by about 15 per cent vis-À-vis dollar since last September.

According to the Confederation of Indian Textile Industry, India’s textile exports are likely to miss the target of $25 billion for the current financial year if the downturn continues.

“Under the difficult circumstances, we cannot be expected to export levies and taxes. While we get reimbursement of central taxes, the state levies add up to a tidy 6 per cent, which is quite a burden on the rupee-hit exporters,” the CITI Chairman, Mr P.D. Patodia, told reporters here.

Export figures

India’s textile exports amounted to $19 billion last year and the target for this fiscal was set at $25 billion. Exports declined by 18.25 per cent in April this year.

“Going at the current rate, it looks as if we would be able to achieve only $18 billion,” Mr Patodia said.

Jobless number

He said over 35,000 workers have already been rendered jobless because of increasing lack of competitiveness by Indian industry.

“This figure could go up to 5 lakh during the current fiscal if immediate steps are not taken,” he said.

In their demands, the industry associations have proposed that the Government could introduce duty free scrips at suitable rates to compensate the State level levies.

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