Textile industry welcomes extension of 2% export benefit

Extension of 2 per cent export benefit under Merchandise Export from India Scheme (MEIS) for more countries with immediate effect seemed a welcome relief to the textile industry, which industry associations say “is reeling under severe stress.”

Explaining the significance of this amendment, M Senthilkumar, Chairman, The Southern India Mills’ Association (SIMA), said the 2 per cent export benefit under MEIS will henceforth be allowed for export of fabrics and manmade fibre spun yarns to African and West Asian countries, Sri Lanka and Bangladesh.

Earlier, the benefit was confined only to countries in Group A, Japan in Group B and Sri Lanka in Group C for fabrics.

In the case of manmade fibre spun yarn, the benefit was extended only to countries in Group A and Japan in Group B. Now the benefit has been extended to all countries in Group A, B and C for both fabrics and manmade fibre spun yarn.

For made-ups and garments, the benefit was available to all countries in Group A, but only Japan in Group B. Now this has been extended to all countries in Group A and B.

While hailing the announcement, the SIMA chief said cotton yarn could also have been included as the spinning sector is both capital and labour intensive and under more stress when compared to other segments. “However, the relief given to the manmade fibre spun yarn might help increase exports albeit slightly, which would in turn help the spinning sector.

“Further, if fabric and export of other value added products improve, it would lift the domestic demand for yarn. The spinning industry is at present struggling with excess production capacity,” he said.

Terming it as a ‘Diwali gift’ (considering that the announcement came a fortnight ahead of the festival of light), A Sakthivel, President, Tirupur Exporters’ Association, said this relief would help enhance the competitiveness of knitwear garment exports from India.

Indian Texpreneurs’ Federation Secretary D Prabhu said this move would help boost textile exports. “The industry has been under severe pressure for the past six months. The extension of the benefit to all target markets will, therefore, benefit the industry. The spinning industry should now consider moving up the value chain to make more fabrics and garments and capture a bigger share in the global market.”

COMMENT NOW