COVID-19: AEPC pitches for amnesty scheme for non-fulfilment of export obligations

Apparel exporters on Wednesday urged the government to bring an amnesty scheme in case there is non-fulfilment of export obligations as traders are facing issues in terms of raw material supply on account of the coronavirus outbreak.

Under some export promotion schemes like Advance Authorisation and Export Promotion Capital Goods schemes, import of machines and raw materials used to make exportable products is allowed at zero duty but with an export obligation.

Exporters are of the view that in such a scenario, meeting these obligations would be a bit difficult for them.

In a letter to Commerce and Industry Minister Piyush Goyal, Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said apparel trade is deeply integrated with the global value chain and it has been impacted by the disruption in both imports and exports.

Uncertainties are developing over timely deliveries of imports of raw materials like fabric, and accessories supplies, and exporters are facing tough situation with regard to export orders as global buyers are asking for deferment of consignments.

He said the need of the hour is to "bring out an amnesty scheme for non-fulfilment/short-fulfilment of exports under various export obligation schemes, especially in a force-majeure (unforeseeable circumstances that prevent someone from fulfilling a contract) situation such as the present one".

Sakthivel added that the current situation warrants urgent remedies and support from the commerce ministry.

"Since the last one week, many of the major brands and buyers from the US and EU have asked for postponement of orders or shipments which have completely upset our business and schedule," Sakthivel said.

He added that such uncertainties, coupled with a weak demand position in major markets have started impacting the order position, production schedules, inventory pile up, working capital and export realizations.