Hosiery Units Flay Cut In Duty Drawback Rate

The governments decision to scale down duty drawback rates on knitted garments by eight per cent will prove to be a fatal blow to the garments industry and will hit exports in particular, Federation of Indian Hosiery Exporters president S S Goenka has said.

According to Goenka, the consequences of the decision are bound to be disastrous and irreparably damaging both for the individual exporters, who will lose heavily against their prior sales commitments, and the government as exports are likely to drop steeply. He said the governments export-friendly stance is a farce and is confined to merely paying lip service. Actions do not match promises and this is what hurts the industry, he said.

Hosiery exporters say the governments decision has come when exports had recorded a slowdown. Garment exports, the highest foreign exchange earner, which were rising for the last three years at about 20 per cent per annum, are now recording a negative growth, Goenka said.

As a result, thousands of small exporters spread across the country are on the verge of closure because of losses sustained on account of weakening of the European currencies against dollar.

Besides, while other Asian competitor countries have all devalued their currencies in the last one year, the rupee has firmed up against the dollar. This has robbed the Indian exporters of their competitive edge, Goenka said.