The Cotton Textiles Export Promotion Council (Texprocil) will shortly submit its suggestions to the government on alternative programmes to replace some of the existing export promotion schemes for the textiles and clothing sector.
The council had engaged a consultant who is expected to submit a report by the end of this month. The consultant and the council are holding interactive meetings in different textile clusters now. Three such meetings had already been held and a similar number will be organised. A. Ravindrakumar, joint director, Texprocil, Harsha Vardhan Singh, chairman of IKDHVAJ Advisers (consultant) and Jayant Dasgupta, an international trade consultant, told The Hindu here that India had to phase out all export subsidies by 2018 as its share in global textile and clothing exports crossed the 3.25% threshold in 2010.
Further, the U.S. had recently challenged some Indian export subsidy schemes at the World Trade Organisation (WTO). Schemes such as MEIS, EPCG, and SEZ had to be replaced.
However, India’s textile and clothing exports are less than the 2015 level. “In this context, if India is to remove the export benefits, it will be a further blow to the industry,” said Mr. Singh. Under the MEIS, made-ups and garments get 4% subsidy and fabrics 2%. The EPCG scheme is used widely by processing, weaving and spinning industries, they said.
Helping units scale up
The objective of the suggestions would be to provide incentives and benefits to help all the units scale up, improve their competitiveness, encourage use of technology and enable them to go in for certifications. The alternative schemes should benefit both domestic and exportunits, they said.