The Hindu Business Line : Knitwear exporters seek more sops

Coimbatore, Dec. 8 While welcoming the measures announced for the textile sector in the first tranche of the stimulus package, the Tirupur Exporters’ Association (TEA) said that it would only partially help the knitwear garment exporters in the prevailing competitive environment.

The TEA President, Mr A. Sakthivel, said the exporters were losing their competitive edge, as other competing countries extended increased export incentives for textile products.

“Pakistan has reintroduced the research and development assistance at 6 per cent for garments, launched a TUF scheme similar to ours, announced a 3 per cent interest subvention on packing credit and allowed a moratorium of two years on repayment of both principal and interest on term loans taken by the textile industry.

“China has increased VAT refund rates to 13 per cent for synthetic textile products from 9 per cent and for cotton products from 11 per cent to 13 per cent since August. Whereas in India, the production costs have gone up significantly and we are not in a position to concede to the buyers’ request for a reduction in price.”

“If the crucial issues are not addressed immediately, we will suffer a 25 per cent decline in growth and in due course witness flight of orders to competing countries. If the orders are lost, it can be very difficult to regain them. This coupled with over 50,000 workers being rendered jobless would only add to the woes of the industry and the economy,’ he said.

Stressing on the need for a five-year tax holiday for garment exporters, he sought a two-year moratorium on term loan and interest payments, service tax and fringe benefit tax waiver instead of tax refunds on a few services.

He also suggested an increase in the duty drawback rate for cotton knitwear garments to 12 per cent and increase in interest subvention by another 2 per cent with retrospective effect to bail out the export units.

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