Panel To Suggest Schemes To Boost Textiles, Garment Exports
The government has constituted a coordination committee of the Textile Export Promotion Council under the chairmanship of the textiles secretary to devise schemes to increase export of textiles and garments.
In addition, the director general of foreign trade (DGFT) is looking at ways to modify the recently announced duty entitlement passbook (DEPB) scheme for garment exporters. One of the changes to be introduced is to allow the garments sector to import fabrics, although the item is now on the restricted list of imports.
The garments industry has expressed disappointment with the new export-import policy, which abolished the special value-based advance licensing scheme for the sector.
In the new policy, the industry says, the duty exemption scheme has been totally changed. The quantity-based scheme is not workable, says Apparel Export Promotion Council chairman K L Madan, since it uses input output norms and the industry highly fashion-sensitive uses various styles and sizes of a particular product which are not amenable to these norms. It was due to this problem that the special Vabal scheme had been made available to the garment industry. The scheme, it is argued, was working well and the council had sought its continuance, if a special scheme could not be introduced for the sector.
The DEPB scheme accords a low entitlement on pre-export basis. The amount of inputs that the exporters can import free of duty is 5 per cent of the average f.o.b. (free on board) value of exports in the three preceding years. Under the special Vabal scheme, a garment exporter was entitled to import his inputs on a value basis and his entitlement was 20 per cent of the f.o.b. value of exports in the preceding licensing year. Under the post-export scheme, the entitlement for the garments industry has been pegged at 20 per cent.
The main problem faced by the garments sector is that the DEPB scheme allows import of only the items listed under the open general licence scheme. Fabrics the main import of garment exporters is on the restricted list.