With export incentives getting delayed under various schemes, textile and clothing exporters say they are unable to tap opportunities in the international markets, and revival is taking time.
According to industry sources here, the Central government offered incentives under two major schemes last year — the Rebate of State Levies (ROSL) Scheme and the Merchandise Exports from India Scheme (MEIS).
In mid-2019, the government replaced ROSL and MEIS with the Rebate of State and Central Taxes and Levies (ROSCTL) Scheme. It also offered an ad hoc, one-time special incentive of 1% till December.
With sluggishness in textile and clothing exports and yarn and fabric exports not covered under the new scheme, exporters sought the continuation of MEIS and ROSCTL. The government allocated ₹9,000 crore for ROSCTL. However, reportedly owing to inadequate funds, the portal does not accept applications under the ROSCTL Scheme since April this year, say sources.
Recently, the government introduced a new scheme called, Remission of Duties and Taxes on Export Products (RODTEP). This is supposed to be a comprehensive scheme for exporters. But rates are yet to be fixed.
Currently, the industry gets only the duty drawback benefit. It should allocate adequate funds for ROSCTL or launch RODTEP at the earliest, says Raja M. Shanmugham, president of Tiruppur Exporters’ Association. The industry has been facing several hardships. Without the export incentives, revival takes time and the exporters are unable to tap into the opportunities, he adds.
Ashwin Chandran, Chairman of Southern India Mills’ Association, says the export benefits should be extended to yarn.
Pollachi Member of Parliament K. Shanmuga Sundaram said in a release that the government should immediately allocate funds for ROSCTL and continue the ad hoc, one-time incentive. “Textile industry is facing an acute financial crunch owing to the COVID-19 effect. Thereby the industry was forced to diversify its operations and also retain the garment manufacturing operation. The industry requires support from the Central government,” he said.
