India’s exports of MMF textiles on path of recovery

India’s exports of MMF textiles on path of recovery

The exports of MMF textile are on a path of recovery and the target of US$ 6 bln set for the year 2013-14 shall be achieved, stated Rakesh Mehra, chairman, The Synthetic & Rayon Textiles Export Promotion Council while addressing the 59^th Annual General Meeting of the Council in Mumbai.

The Chairman was optimistic that the scenario during 2013-14 would be better with the US economy and Eurozone showing signs of recovery, which is expected to bring stabilization in the global economy. He stated the weakness in rupee has come in at an opportune time and is likely to aid efforts to boost exports. The exports of Indian MMF textiles during August 2013 witnessed a growth of 17% as compared to the same month in the previous year.

According to the chairman, the slow economic recovery in Europe and the US, weak global demand, economic slowdown in developing countries and continuing political crisis in the Middle East had adversely impacted exports of Indian man-made fiber textiles during 2012-13.

The Indian man-made fiber textile exports are also adversely affected as the incidence of taxes is the highest in MMF value chain and the drawback rates are not neutralizing the entire duties. Mehra observed that the withdrawal of DEPB Scheme has been a severe setback to the man-made fiber textile exports as when the Scheme was in operation the duties were neutralized and there was positive growth in the exports over the years.

Stressing the need for a reduction in excise duty from 12% to 4 % for man-made fibers, Mehra said that this step will ensure fiber neutrality and play a major role in reviving MMF textile industry and thus exports.

He welcomed the enhancement of interest rate subvention from 2 to 3% across the tariff lines for MSMEs and some select tariff lines in made-ups. He has further requested the government to allow subvention benefit to all the tariff lines of MMF textiles, which he believes would reduce interest burden on exporters during the difficult times.

The chairman expressed satisfaction at the inclusion of new markets and products under the Focus Market and Focus Product Scheme and suggested that more markets should be included in Focus Market Scheme. Mehra informed that he has requested for bonus benefit of additional 2 % on export of the entire MMF Textiles at least for one year so that exports are stabilized. The Chairman has requested for reinstatement of CE Rule 12B, which will allow merchant exporters to avail cenvat credit of duties on inputs and thus give boost to their competitiveness.

SRTEPC chairman also pointed out that high transaction cost in exports is an area of concern as it impacts competitiveness. He informed that the council has put forth its suggestions highlighting areas related to banking. Logistics cost, multiple taxations, procedural bottlenecks, which lead to high transaction costs for improving export competitiveness.

Dwelling on the Council’s promotional programs, Mehra mentioned that the Council has successfully organized exhibition and fairs in various countries recently including INTEXPO Pakistan and INTEXPO Iran, which went a long way in boosting exports to these markets.

The Council has chalked an ambitious promotional program for the year 2013-14 with exhibitions being held in markets such as Columbia, Peru, Ecuador, Mexico, Ethiopia, Djibouti, Sudan, South Korea, China, Burma, Cambodia, Saudi Arabia and Pakistan. The SRTEPC chairman sought the active participation of member companies in the promotional programs to achieve the export target of US$ 6 bln set for the year 2013-14.