The Indian government is considering offering more preferential export measures to the textile industry, especially to garment manufacturers. They are still trying to restore their foothold in traditional markets such as the United States and the European Union.
Minister of Industry and Commerce Anand Char stated that after the Ministry of Industry and Commerce completed the review, some new exporters will be offered new preferential measures in January this year.
He said that the export of most industries started to improve. However, there are still several industries that perform poorly, such as ready-made clothes and tea, and exports are still falling.
In the first three quarters of this fiscal year, ready-made garment exports fell by 3% to US$7.6 billion due to a decrease in exports to the United States and Europe. During this period, total exports increased by 29.5% to 164.7 billion U.S. dollars.
At the end of 2008, when exports began to decline, the textile industry received support. DKNair, President of the Indian Textile Industry Federation (CITI) stated that support is not enough. The government announced that it will provide 2% of credit subsidies or interest subsidies for textile companies, but the final notice is limited to 8 products.
CITI requires the government to expand the scope of the market's key product plans, from clothing to garments, and to all market outlets to enjoy the benefits offered by this program.
According to the plan, exporters receive tax-free import certificates, or rights, for special markets such as the EU and non-traditional markets such as Latin America, where the tax exemption rate is 2% of the export value. The Ministry of Commerce is reviewing the expenses involved before it can finally finalize the incentive plan.
The problem of funding sources is very real. Even if it provides a 2% reward for clothing exports, the Ministry of Finance will also need about Rs 400 crore. Ajay Sahai, president of the Federation of Indian Export Organizations, said that it is clear that the textile industry does need more incentives.
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