Govt eases garment export incentives

Decision taken in the wake of various complaints raised by exporters

Concerned over stagnating garment exports, the Union ministry of commerce has removed restrictions under the Incremental Exports Incentivisation Scheme.

The Directorate General of Foreign Trade, in a notification, allowed regional authorities to process cases in this regard without imposing any cap. The earlier stipulation restricted the entitlement to 25 per cent growth or incremental growth of Rs 10 crore in value, whichever was less.

R K Dalmia, chairman of The Cotton Textiles Export Promotion Council, said: “This decision will improve the cash flow of exporters.”

The decision was taken in the wake of various complaints from exporters. The present restrictions came in late 2013 and were not part of the original scheme; this led to multiple lawsuits, too. Textile exports have remained at $40 billion annually for two years.

The government has also included exports of made-ups (a category defined in the rules) to select countries under the Merchandise Exports from India Scheme.

“This will promote export of made-ups to Australia and New Zealand,” said Dalmia.

Also, landing certificates shall not be required under MEIS. Exporters faced difficulty in getting these from shipping companies, beside incurring costs. The dispensation of the requirement to furnish landing certificates has come as a huge relief to the exporters and would certainly reduce the transaction costs for the exporters, said an exporter.