The Hindu Business Line : ‘Tariff preference plan will help Indian textiles sector’

Coimbatore, April 8 The duty-free tariff preference scheme (DFTP) for the least developed countries, including African countries, unveiled on Tuesday by the Prime Minister, Dr Manmohan Singh, would boost the scope for India’s textile industry to access cotton relatively at cheaper rate, on the strength of the ‘nil’ duty component the scheme would provide, according to textile entrepreneurs.

“We’ll be in a position to get cotton imported from African countries without duty and to that extent it will be advantageous for Indian textile producers,” said Mr A. Sakthivel, President of the Tirupur Exporters Association. He also felt that the Indian garment sector could also have the scope to increase its market share by tapping the African market under the window of opportunity provided by the DFTP scheme.

Currently, the Indian textile industry that is sourcing international cotton bears 10 per cent import duty and has been demanding either the removal or the bringing down of the import duty by half, to make raw material imports cheap.

“Though the industry seeking import of cotton will have to pay the international prices, the DFTP route will now enable the Indian textile companies importing cotton from Africa do so without payment of this duty and to that extent its raw material becomes cheaper,” feels Mr Prem Malik, Chairman of the Cotton Textile Export Promotion Council (Texprocil).

As for the garment sector, it will be prudent on the part of India to insist on rule of origin and minimum value addition on the garments to be exported from Africa under the DFTP. Otherwise, African countries could be used as a convenient channel by third countries to ship their goods into the Indian market using this preferential route, Mr Malik said, adding that a minimum value addition of 40 per cent be insisted on for either the yarn or fabrics that are involved. As for shipping yarn or fabric from India to Africa for further conversion into garments, the logistic costs were to be looked into, he added.

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