Textile exporters seek higher duty drawbacks, rebates and RoDTEP to tackle crisis
The Synthetic and Rayon Textiles Export Promotion Council has sought higher duty drawbacks, rebates of State and Central taxes and levies (RoSCTL), and Remission of Duties or Taxes on Export Products (RoDTEP) rates to overcome the simmering Red Sea crisis.
The brewing crisis has hit textile exports hard and resulted in delays in shipments, in addition to pushing up costs.
Cargo ships passing through the Red Sea have been attacked by militants for the last few days. It is one of the busiest trade routes that connects Europe and Asia through the Suez Canal.
As a result of the attacks, ships are reportedly taking a 6,000-nautical-mile detour around Africa, which means an additional 15 days of transit time. It is causing a steep increase in freight rates and insurance premiums.
Additional burden
Bhadresh Dodhia, Chairman of the Synthetic and Rayon Textiles Export Promotion Council, said the deteriorating situation in the Red Sea is a matter of serious concern to the textile and clothing exporters.
Freight rates to European ports from India have already increased by 40 per cent with a possibility of further rise in rates in the near future. The rise in shipping costs will become an additional burden for exporters of textiles and clothing, said Dodhia.
He urged the government to provide support to the textile and clothing exporters so that they can handle the situation and enable them to survive and sustain their exports.
The majority of shipments of textiles and clothing pass through the Suez Canal, which connects the Red Sea and the Mediterranean Sea.
Dodhia pointed out that freight rates have stabilised in recent times after witnessing a steep increase in rates during Covid-19 and the current crisis in the Red Sea has once again pushed up freight rates, which is not good for the exporters, he said.
Expressing concern that if the crisis prolongs and is not contained quickly, Dodhia said it will not only have an adverse impact on exports from India but will severely disrupt the global supply chain and hurt the world economy.