TIrupur Exporters Association Calls For Urgent Restoration Of Govt. Incentives

Trade & Policy

TIrupur Exporters Association Calls For Urgent Restoration Of Govt. Incentives

Tirupur Garment exporters expressed concern over the continuing trend of fall in exports of RMG for the third consecutive month, in a Y-on-Y comparison. In the month of October the RMG exports plunged a sharp 40%. This was followed close on heels by a dip of 10 and 13% in November and December 2017.

RMG exporters expressed the view that the Union textile ministry has to provide adequate incentives and also step up their pace of negotiations for effectuating Free Trade Agreements (FTAs) with both the European Union and the United States.

The exporters unanimously chorused, “We welcome the macro-economic corrections made by the union government in the form of demonetization and GST. However, these corrections being effectuated mandate that the government provide adequate support and hand-hold us to offset the negative impacts of the corrections being made.” Among the slew of measures they suggested for financial incentives, their primary concern was the right rate of duty drawback. This view was endorsed by Tirupur Exporters’ Association President, Raja M Shanmugam.

According to Raja, there were certain features that were overlooked by the government. Though the government had stated that on payment of GST, the industrialists are entitled to input credit, the government failed to study the impact of reduction in incentives that cover duty drawback, Rebate of State Levies (RoSL) and merchandise exports from India scheme (MEIS), he pointed out.

Even the increase in MEIS from 2% to 4% till June 2018 has come by the way of too little and too late, the industrialists opined. They said that the move followed close on heels of frequent persuasion byh industry and it fails to cover up for the over-all deficit of 2.7% in sharp contrast with the pre-GST regime days.

Consequently, the knitwear exporters from Tirupur who were already operating on wafer thin profit margins owing to stiff competition in the international arena are unable to quote attractive prices to their overseas clients. Raja in his statement explained that if an exporter loses a buyer, it will by no means be easy for him to re-establish the business relationship. “In addition to the woes we are facing, the depreciation of the US dollar has made things worse for us,” he added.