The foreign trade policy announced on Thursday has evoked a mixed reaction from the textile industry. While the Confederation of Indian Textile Industry (CITI) and the Apparel Export Promotion Council (AEPC) complained that the policy fell far short of what was required in the context of the current global economic meltdown, the Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) hailed it as positive and growth-oriented.
The CITI Chairman, R.K.Dalmia, said that even while inclusion of 17 technical textile products in the focus product scheme was a welcome step, limiting benefits such as one per cent additional duty scrips for status holders and zero duty for imports under the EPCG scheme to units that were not deriving benefit from the Technology Upgradation Fund Scheme (TUFS) was disappointing, as most textile units were covered under the scheme and they would be denied the benefits.
Likewise, he said, addition of more countries under the market-linked focus product scheme would be of no use as the list of products eligible for incentives under the scheme covered only garments, made-ups, knitted fabrics and synthetic textile fabrics.
''Countries like Cambodia and Vietnam, which have been covered by this facility are among major exporters of garments. [On the other hand], they import substantial quantities of yarn and woven fabrics. However, these products have not been extended the benefits, except synthetic textile fabrics'', he said.
''It is unfortunate that as in the case of the Union Budget presented last month, the Foreign Trade Policy also ends up speaking for the textile and clothing industry, but doing very little to actually ensure its survival and growth''.
The AEPC Chairman, Rakesh Vaid, in turn, was disappointed that neither the rate of the duty-free scrips had been increased to five per cent, nor had it been extended to September as desired by the industry.
He was also unhappy that the zero duty under EPCG Scheme would not benefit small and medium exporters as it excluded current beneficiaries of TUFS and beneficiaries of the Status Holder Incentive Scheme in that particular year.
As for the expansion of the market-linked focus product scheme for synthetic textile fabrics, textile made-ups, and knitted and crocheted fabrics if the exports were made to 13 identified countries, and increase in cash assistance under the Focus Market Scheme and incentives under the Focus Product Schemes, he said they were hardly adequate.
''These measures do not compensate for a comprehensive and competitive enhancement strategy in the form of a stimulus package as Indian goods are over 20 per cent costlier than those supplied by some competing countries like China, Bangalore, Vietnam and Cambodia''.
Chairman of SRTEPC, Ganesh Kumar Gupta, on the other hand, welcomed the Policy as being in the ''right direction'' and said that while the increase in the duty credit entitlement rate under the Focus Market Scheme will encourage exporters to venture into Latin America, CIS and the African markets, the extension of the DEPB scheme upto December 2010 would provide the necessary stability for exporters in taking a long-term perspective during the process of negotiation.
Likewise, he said, the inclusion of export of synthetic textiles fabrics to specified countries under the market-linked focus product scheme and inclusion of technical textiles under the focus product scheme would provide encouragement to the exporters of synthetic and technical textiles.
He also welcomed measures such as introduction of zero duty EPCG scheme, duty credit scrips for status holders, and increased fund allocations under the MDA and MAI schemes as steps in the right direction.
He, however, noted that more measures should have been taken to help the exporters to overcome the difficult situation because of the slowdown in major export markets due to the global economic melt down.