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Updated: April 3, 2013 00:47 IST

Textiles Ministry wants extension of interest subvention scheme

Sujay Mehdudia
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Anand Sharma
The Hindu Anand Sharma

With the financial package for exporters becoming a bone of contention between the Commerce and Finance Ministries, labour-intensive sectors such as handlooms, handicrafts and cotton textiles are crying for attention, and are seeking a quick resolution of issues impacting them to avoid further loss of jobs and closure of manufacturing units.

In the run-up to the Foreign Trade Policy (FTP), now rescheduled to be released in the third week of April, instead of the first week earlier, the Textiles Ministry had submitted proposals to the Board of Trade (BoT) and the Finance Ministry for giving a boost to exports from the handloom, handicrafts, cotton textiles and readymade garments sectors. With exports showing no sign of revival and exporters facing tough competition in various markets, the continued delay in taking decisions for inclusion in the FTP are hurting these sectors badly.

The Ministry feels that the 2 per cent interest subvention scheme should be extended beyond the March 31, 2013, date as it would facilitate exporters and help them to stay competitive in the international arena.

In its submissions to the BoT, the Textiles Ministry has pleaded that the duty credit scrip equivalent to 2 per cent of the FOB value of exports of handloom products to all countries, effective from August 2009 onwards, should be increased to 5 per cent. Such a move would lead to genuine handloom manufacturer being compensated appropriately so as to feel encouraged to continue his activities, the Ministry has argued.

Similarly, the Textiles Ministry has sought inclusion of Australia, Canada, Portugal, Russia, Romania and South Africa in the Focus Market Scheme as such a move would lead to manifold increase in handloom exports. Another proposal is that exports of handloom goods may be entitled for triple weightage of exports made for grant of star export house status. “The facilities extended to the status holders would ultimately benefit the weaving community which is rural-based,’’ a senior official said. In addition, the Ministry has sought exemption from customs duty to the machinery and equipment needed for cabinet dyeing using hand yarn. “Such a move would help the handloom industry to establish cabinet dyeing quality goods with Azo-free dyes, the current requirement in the international trade scenario,” the official added.

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