The Hindu : Business : Textile units seek incentives to counter rupee appreciation

Online edition of India's National Newspaper
Wednesday, Nov 07, 2007
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Business

Textile units seek incentives to counter rupee appreciation

Staff Reporter

Want Centre to reimburse State levies

May miss this fiscal’s export target
Extension of
post-shipment
credit sought

NEW DELHI: The Indian textile and garment industry on Tuesday urged the Centre to immediately announce sops, including reimbursement of the central and state taxes, to cope with the financial losses being incurred due to the appreciation of the rupee vis-a-vis dollar.

Addressing a press conference here, Confederation of Indian Textile Industry (CITI) Chairman, P. D. Patodia, said the impact of appreciating rupee was already visible as the Indian industry had started losing export orders to other developing nations, particularly neighbouring countries. If the trend continues, there would be massive job losses in both the textile and the garment sectors, he added.

“Our textile exports are likely to miss the target of $25 billion for the current financial year by about $7 billion, and it is unlikely to even meet the last fiscal’s textile exports figure of $19 billion. In April this year, exports declined by 18.25 per cent. The impact of appreciating rupee is even more as 70-80 per cent of the exports, including that to European nations, are dollar denominated,” said Mr. Patodia.

CITI, comprising 11 organisations from various regions, States and sectors of the textile and garments industry, has urged the Centre to arrange for reimbursement of the State levies that add up to 6 per cent, which is a huge burden on the rupee-hit exporters.

It suggested that the ‘special additional duty’ (SAD) corpus lying with the Ministry of Finance could be used to help the exporters. Similarly, CITI wants that the pre- and post-shipment credit should be made available for the industry at 6 per cent and the post-shipment credit should be extended from the present three months to one year.

“We are also demanding cut in interest rates to make it on a par with our competing nations. Similarly, we want a cut in power tariffs that are high compared to other nations. Notably, the amount spent on power consumption forms almost 15 per cent of our sales realisation. The industry is not against appreciating rupee, but the Government should also consider these crucial factors that were affecting the growth of the industry,” said CITI Secretary General, D. K. Nair. According to him, over 35,000 workers have already been rendered jobless because of increasing lack of competitiveness by the Indian textile industry.

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