Duty Drawback Rate Cuts May Hit Exports

The cut in duty drawback rates on about 500 items will hit exports and make them uncompetitive, says the Federation of Indian Export Organisations (FIEO).

Reacting to the new duty drawback schedule announced by the government effective from June 1, 2002, S K Saraf, FIEO vice-president, said the move to cut drawback rates on woven and knitted garments would dampen exports of these items by making them uncompetitive in the global market.

The reduction in drawback rates on several handicrafts items, brass/plastic imitation jewellery, plastics items, rubber articles, coffee and tea among others would adversely affect these traditional items' exports, he added.

Acknowledging that the duty drawback rates are announced in accordance with changes in the excise and Customs duties, he nonetheless felt in the present depressed export circumstances, there should not have been any reduction in the drawback rates.