Duty sop for cotton yarn exporters may go.

After having suspended the provision of concession of 7.67 per cent under the Duty Entitlement Passbook (DEPB) Scheme, the Centre is likely to suspend the four per cent duty drawback facility also for cotton yarn exporters.

According to highly placed official sources in the Union Textiles Ministry, a meeting of senior officials held at the Finance Ministry on Thursday was in favour of suspending the duty drawback facility too.

“The paper would be sent to the Finance Minister, Pranab Mukherjee, for his final decision. We hope the duty drawback facility would also be suspended soon.”

The Union Textiles Minister, Dayanidhi Maran, had met Mr. Mukherjee on Wednesday and had sought the suspension of the duty drawback facility also as a follow-up to the suspension of the concession under the DEPB scheme.

The Thursday meeting was a follow-up to that. The sources said the officials also discussed the issue of imposing a ‘prohibitory' tax on export of cotton yarn and it was decided to keep the issue in abeyance for the time being.

At his meeting with Mr. Mukherjee on Wednesday, Mr. Maran had reportedly impressed upon the need to suspend incentives for yarn exports on the ground that prices have been steadily rising over the past three months to the detriment of garment and handloom sectors.

Notification

Earlier on Monday, the Textile Commissioner had issued a notification imposing restrictions on export of raw cotton, again as a measure to keep the prices of yarn under check.

The Textile Ministry had been pro-active pressing for measures to control the export of both raw cotton and yarn on fears that it may, otherwise, result in garments and handlooms produced in India becoming uncompetitive in the global market.

The fears are based on the fact that there has been a major shortfall in cotton production across the world this year.

The sources also pointed out that China, which is a major competitor for India in apparels, and which has registered a 15 per cent fall in cotton production this year, was reportedly sourcing a large quantity of cotton from India for its industry.

Source : The Hindu