The Hindu Business Line : Textiles: FICCI for full tax exemption on export earnings for short term

It also asked for an extension of working hours and that units employing up to 1,000 people should be outside the purview of the Industrial Disputes Act.

Our Bureau

New Delhi, June 18 A delegation of the Federation of Indian Chambers of Commerce and Industry (FICCI) on Wednesday suggested to the Union Minister for Textiles, Mr Dayanidhi Maran, that while there should be a temporary 100 per cent tax exemption for the textile industry from export earnings, the drawback rates should be hiked by five per cent and export credit should be provided at seven per cent till 2010.

The delegation, led by Mr Harsh Pati Singhania, President, FICCI, further added that exporters should be exempted from the Service Tax, the Terminal Excise Duty and the Fringe Benefit Tax, while the export incentives for cotton should be withdrawn and its Minimum Support Price need not be raised any further.

The industry chamber made these suggestions keeping in view that Indian exports to the US have fallen by 14 per cent during January-April, 2009.

Textiles is the second largest employer in the country after agriculture, and would require skill development in a “Mission Mode approach” to absorb 10 million people in the next five years, said FICCI.

With weak demand in traditional markets such as the US and the EU, FICCI suggested that the Government provide 100 per cent risk coverage through cheaper ECGC (Export Credit Guarantee Corporation) schemes for exports to countries in Latin America and West Asia.

Among other measures, FICCI suggested changes in labour laws, encouraging foreign direct investment in the sector, exports to non-traditional markets, besides an early implementation of the Goods and Services Tax. It also asked for an extension of working hours and that units employing up to 1,000 people should be outside the purview of the Industrial Disputes Act.

While India’s exports fell in January-April, that of Bangladesh and Vietnam increased by 12 per cent and 5.2 per cent respectively. Today, while India’s share in the US apparel market is 5.7 per cent, Vietnam’s and Bangladesh’s stands at 8 per cent and 6.1 per cent respectively, said FICCI.

China’s share, however, remains much higher at 32.4 per cent.

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