Wool Exporters Seek Restoration of Old Duty Drawback Rates.

Chandigarh: The Wool and Woollens Export Promotion Council (WWEPC) has urged the textiles ministry to restore the old rates of duty drawback on wool products to reduce exporters' losses due to forex rate fluctuation, reports PTI.

With exporters unlikely to achieve the $630 million target for wool exports in 2010-11, WWEPC chairman Ashok Jaidka told PTI: "We have demanded from ministry of textiles to revert to earlier rates of duty drawback, which can give some cushion to wool exporters to contain their losses."

In September, the Centre had slashed the rate of duty drawback on wool products, including wool tops, woollen yarn and woollen fabric, in the range of 5% to 20%, in line with its policy to reduce the fiscal incentive provided to a host of export sectors during the global economic slowdown.

According to Mr Jaidka, the duty drawback rate on woollen items like sweaters, overcoats and wind-cheaters was reduced from 10% of the Free On Board (FOB) value to 7.5%.

Moreover, appreciation of the rupee against the dollar in the past few months also made a dent in the revenue realised from exports, said Mr Jaidka.

According to the latest data, the country's wool and wool-blended exports observed a sharp 26.42% fall during the first four months of the current fiscal. Exports were valued at Rs596.71 crore in April-July, 2010, as against Rs809.01 crore in the corresponding period last year.

The main reason cited for the fall in exports was the late placement of export orders and uncertainty in exchange rates. "Our bulk buyers, especially in the US, placed late orders this year in anticipation of appreciation of the rupee against the US dollar in order to claim discounts from us. It was the main cause behind the dip in exports volume," he said.

The bulk of the country's wool products are exported to the US and Europe.

Textiles minister Dayanidhi Maran had also expressed concern over the sharp fall in wool exports at a meeting to review export performance earlier this month.

In the face of falling exports, the textile industry has indicated it is unlikely to achieve the export target of $630 million for 2010-11. "It may be a bit difficult to achieve targeted exports this fiscal, though we will put in extra efforts to go for it," he said.

Total wool exports stood at Rs2,015.82 crore in 2006-07, but fell to Rs1,783.13 crore in 2007-08. Wool exports later rose to Rs2,199.50 crore in 2008-09 and then further to Rs2,262.73 crore in 2009-10.

On the advice of Mr Maran, the WWEPC will participate in trade fairs in Italy in December, Mexico in January, 2011, Moscow in February, 2011, and Cairo in March, 2011, with the aim of boosting export volumes.

Source : moneylife.in