Government Mulls More Sops for Textile Exports.

NEW DELHI: The government is considering more export sops for the textile industry, especially readymade garment producers who are still struggling to regain their foothold in the demand-hit traditional markets of the US and the European Union.

Commerce and industry minister Anand Sharma had announced that fresh sops would be given to some exporters in January this year after a review by the department.

“Almost all our exports have started doing well. It is only a couple of sectors like readymade garments and tea which are still reporting a fall in exports,” a commerce department official told ET. Resources, however, remain a constraint as any support to textiles, which is one of the top exports from the country, involves considerable expenditure, agovernment official said.

In the first three quarters of the fiscal, exports of readymade garment contracted 3% to $7.6 billion due to lower exports to the US and the EU. Overall exports grew 29.5% to $164.7 billion during the period.

The textile industry has received support when exports started declining towards the end of 2008, but D K Nair, secretary general, Confederation of Indian Textiles Industry (CITI), says the support has not been enough. The government had announced that it would give a 2% credit subvention or interest discount to the textile sector, but the final notification restricted it to eight products.

“A negligible portion of the textile sector got covered under the credit subvention scheme,” Nair said. CITI has asked the government to extend the marketlinked focus product scheme, which is available for garments, to readymade as well and extend it for all markets.

Under the scheme, exporters get duty-free import scrips, or entitlements , valued at 2% of export volume for specific markets like the EU and non-traditional markets like Latin America. he commerce department is looking at the expenditure involved before finalising the incentive package.

The problem of resources is very real as even a 2% incentive to garment exports cost the exchequer about . 400 crore, said Ajay Sahai, director general, Federation of Indian Export Organisations . “If we look at overall export performance, it is clear that the textile sector does need more incentives ,” Sahai said.

Source : economictimes.indiatimes.com