Mumbai: India''''s textiles and clothing exports during 2006-07 totalled $18.73 billion, as against exports valued at $17.52 billion during the year 2005-06, registering a growth of 6.91 per cent, according to the latest data released by the DGCIS.
Provisional foreign trade statistics released by the DGCIS indicate that India''''s exports in the first quarter of this financial year registered a decline of 14 per cent in dollar terms compared to the corresponding period of the preceding financial year, minister of state for textiles, EVKS Elangovan informed the Lok Sabha, in a written reply.
The textile industry attributes this decline mainly to the appreciation of Indian rupee vis-a-vis the US dollar, he said, adding that in order to strengthen and support the textiles industry, the government has announced the following steps:
(i) DEPB rates enhanced by 3 per cent for 9 sectors, including textiles (also handlooms), RMGs and handicrafts. For other items, DEPB rates were enhanced by 2 per cent.
(ii) ECGC premium reduced by 10 per cent.
(iii) Amount of Rs600 crore released for clearing arrears of CST reimbursement and terminal excise duty.
(iv) Duty drawback rates enhanced by 10-40 per cent of the existing rates.
(v) Subvention on credit rate allowed up to 2 per cent.
(vi) Refund of service tax paid by exporters on services linked to export of goods.
(vii) The Technology Upgradation Fund Scheme (TUFS) has been made operational from 1-4-1999 to facilitate the modernisation and upgradation of the sector. The TUFS has been modified and extended beyond 31 March 2007. The scheme is now in operation. For the speedy modernisation of the textiles processing sector, the government is operating, a credit-linked capital subsidy scheme at the rate of10 per cent under TUFS, in addition to the existing 5 per cent interest reimbursement.
(viii) The fiscal duty structure has been generally rationalised to achieve growth and maximum value addition within the country. Except for mandatory excise duty on man-made filament yarns and man-made staple fibres, the whole value addition chain has been given the option of excise exemption.
(ix) The import of specified textiles and garment machinery has been allowed at a concessional rate of customs duty to encourage investment and to make our textiles product competitive in the global market. The cost of machinery has also been reduced through fiscal policy measures.
(x) The Duty-free import of 21 items of trimmings and embellishment items is allowed to garment exporters. This can be up to 3 per cent of their actual export performance during the previous year.
(xi) In 2004-05 Budget, the entire textile sector, except for man-made fibre and filament yarn was provided optional exemption from excise duty. In 2005-06 Budget, Central Value-added Tax (CENVAT) on polyester filament yarn has been reduced from 24 per cent to 16 per cent. These modifications in fiscal levies aim at attracting more investments for modernisation of textile sector.
(xii) To facilitate import of state-of-the-art machinery to make our products internationally competitive in post quota regime, in 2005-06 Budget, the customs duty on textile machinery has been brought down to 10 per cent except 23 machinery appearing in List 49 which attracts basic customs duty of 15 per cent.