The Ministry of Commerce announced the much awaited foreign trade policy today.
Shri R.K Dalmia, Chairman, Texprocil stated that the foreign trade policy explains the Vision, Goals and objectives for the country’s Export-Import sector for the period 2015-2020 in a very eloquent manner. The Government has also set for itself a target of US $900 billion to be achieved by 2019-20 from the current level of US $465.9 billion in 2013-14. There are many good initiatives in the policy for promoting Government’s flagship programmes like “Make in India”, “Digital India” and “Skill India”. A number of measures have also been taken to ease doing of business.
While welcoming the macro aspects of the policy, Shri R.K Dalmia regretted that a sector like textile and clothing, which is the second largest employment provider in the country and whose contribution to the country’s growth has been well recognized by the Government’s Economic Survey, only a few weeks back, in terms of strengthening the manufacturing base, promoting exports and generating employment, has not got its dues in the Foreign Trade Policy. At a time when the textile sector which is amongst the most competitive sectors’ in the world is facing challenges of high tariffs, barriers on account of preferential tariff arrangements has been granted duty scrips of 2% only for mainstream cotton textile products but higher rates have been given for handlooms, carpets, coir products under the Merchandise Exports from India Scheme (MEIS). Sectors like cotton yarn have been totally ignored especially at a time when exports of these products have declined sharply and face high logistic cost when exported to markets like Latin America.
Shri Dalmia wondered whether high export targets set by the Government are going to be achieved by promoting exports of handloom and coir products!
He also regretted that no announcement was made with regard to extension of Interest Rate Subvention at a time when the industry is having to bear high cost of capital which is affecting the labour intensive industry.
Shri Dalmia also pointed out that in spite of growing opportunities for textiles products like Yarn, fabrics and Made-ups to China, the Government has not included these items for pursuing market access negotiations with that country. For instance, if the tariffs on fabrics exported to China are reduced to 5% or less, from the present level of 10%, Indian exports to China can be increased substantially as it will link up with the value chain in the region.
Similarly, efforts should be made to negotiate tariff reduction with the South East Asian Countries like Vietnam so as to link up with the value chain in the region which is no less in importance than the South Asia.
Mr.Dalmia appealed to the Government to recognize the potential of textile and clothing sector and give it adequate support so that it can increase India’s exports many fold to world markets.
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