New Delhi, May 25
THE Textile Minister, Mr Shankarsinh Vaghela, on Wednesday convened a meeting of textile exporters and chiefs of various textile export promotion councils, including cotton, apparel, carpet, jute and handicrafts, in order to get a grasp of their problem of not being able to take advantage of the post-quota regime opportunities in global textile trade.
Sources privy to the hour-long meeting told Business Line here that exporters highlighted problems such as insufficient drawback rates and value cap and inflexible labour laws that do not allow exporters any leeway to resort to shift system for women workers, particularly in the high-value apparel sector, and other infrastructure-related and Customs constraints.
They said the drawback/DEPB (duty entitlement passbook scheme) rates, which are direct assistance to the exporters, have further caused problems because of the lower caps, which, in a way, compel exporters to keep unit value realisation low.
The Apparel Export Promotion Council Chairman, Mr A. Sakthivel, said that foreign direct investment was not coming into the apparel sector on a desirable scale presumably because of rigid labour laws. He also pointed out that investment during the non-quota period does not get indirect subsidy, which the industry was getting by way of quota allocation under the New Investors Entitlement System.
Hence, he said, it would be proper if the Technology Upgradation Fund Scheme (TUFS) could be modified to provide better assistance to the garment sector. The council proposed that the additional incentive in the form of 10 per cent capital subsidy for the processing machinery under TUFS might be extended to specified garment making machineries too.