Enhance duty drawback rates to help garment exporters: AEPC

Garment exporters have asked the government to increase the duty incentive on apparels to 13.25 per cent to offset the losses in wake of rupee's appreciation against the dollar.

The dollar is trading at below Rs 47, weakening by over 10 per cent from Rs 52.17 in the first week of March 2009.

The industry, financial institutions and experts are expecting that it will further strengthen up to 12 to 15 per cent in few weeks, thereby making exports less profitable and less competitive, AEPC Chairman Rakesh Vaid said.

"...The government (should) enhance duty drawback rates to 13.25 per cent for cotton garments and corresponding increase in blended and manmade fibre garments," he said.

The present duty drawback rates applicable on apparels is between eight and 10 per cent. In the duty drawback scheme, the government refunds the duty charged on the imported inputs used in the export items.

AEPC, the apex body of Indian garment exporters, further said China has been able to offer much better prices by increasing drawback refunds many times in the past one year.

The present appreciation of rupee against the dollar means 10 per cent less realisation for exporters.

Garments exports during April to August 2009-10 dipped 7.39 per cent to 4.18 billion dollars from 4.51 billion dollar in the same period last fiscal. In 2008-09, apparel exports from India totalled at 10.17 billion dollars.