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Our Bureau

Coimbatore, Aug 15 The Southern India Mills Association (SIMA) has urged the Centre to continue the scheme of interest subvention on export credit and not to tinker with the duty drawback rates.

It has expressed fear that any change in the rules would cripple the textile industry that has already been reeling under the impact of recession.

In a statement here, Dr K.V. Srinivasan, Chairman, SIMA, Coimbatore, said the RBI had lent its support to exporters by extending the interest subvention on export credit by one more year (till March 31, 2009) and extended the ceiling on interest rates up to October 31 with a view to compensating the impact of rupee appreciation against the dollar.

But with the strengthening of the dollar, the RBI has announced termination of interest subvention benefit with effect from September 30. The Government is said to be thinking of rationalising the duty drawback rates.

The SIMA Chairman feared that the proposed move would totally paralyse the industry. The major textile States such as Tamil Nadu, Andhra Pradesh and Maharashtra, were also facing severe power famine.

Dr Srinivasan appealed to the Centre to continue the export incentive of interest subvention (on pre-shipment rupee credit up to 180 days and post-shipment rupee export credit up to 90 days stipulated at BPLR minus 2.5 per cent) and the duty drawback rate benefits at the current levels for the rest of the financial year.

The SIMA Chairman said the textile industry was unable to pass on the increased cost of inputs to the consumers. Competing countries such as China and Pakistan, have increased the export incentives for the textile industry.

He said the R&D assistance provided to the textile industry long back has now been reintroduced by Pakistan and China, and has increased the VAT refund (like duty drawback in our country) from nine per cent to 13 per cent for synthetic textile products and from 11 per cent to 13 per cent for other products last week.

More Stories on : Textiles | Industry Associations | Exports & Imports

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