DEPB rate cut to hurt exports

Duty entitlement pass book (DEPB) rates of a number of commodities have been slashed by significant margins by a recent notification of the Directorate General of Foreign Trade (DGFT).

Traders expect this to adversely affect exports, particularly of textiles.

DEPB rates for many items of textiles or intermediaries going into manufacturing of textiles, have been slashed by around 45 per cent. In the case of polyester and viscose blended yarn, the cut is 65 per cent.

Traders criticised the cuts, more so as the commerce ministry in the Exim policy had promised that changes in DEPB rates would be announced only in consultation with exporters. This process was not followed.

The chairman of Indian Cotton Mills Federation (ICMF), V K Ladia, said, "DEPB amendments would have a negative impact on textile exports as the new rates would be a huge disincentive to the industry and exporters. It would hit the growth considerably, especially of the polyester and viscose blended yarn segment." ICMF said DEPB rates should be left unchanged if not raised.