Higher Ex­port Re­lief for Labour-in­ten­sive Sec­tors

Shoes & Accessories - - The Month That Was -

The mid-term re­view of the For­eign Trade Pol­icy (2015-20) has brought in ad­di­tional re­lief worth ` 8,450 crore an­nu­ally for the labour-in­ten­sive and mi­cro, small and medium en­ter­prises (MSME) sec­tors.

Ex­porters of labour-in­ten­sive items, such as leather and footwear, agri­cul­ture and ma­rine prod­ucts, hand­made car­pets, tele­com and elec­tron­ics com­po­nents, and med­i­cal and sur­gi­cal equip­ment, will now be el­i­gi­ble for 2 per cent higher in­cen­tives across-the­board un­der the pop­u­lar Mer­chan­dise Ex­port from In­dia Scheme (MEIS), un­der the re­view re­leased by Com­merce and In­dus­try Min­is­ter, Suresh Prabhu.

A num­ber of ser­vices such as ac­coun­tancy, ar­chi­tec­ture, le­gal, ed­u­ca­tion and restau­rant, too, will get sim­i­lar re­lief un­der the Ser­vices Ex­port from In­dia Scheme (SEIS).

The in­cen­tives come at a time when ex­porters are strug­gling un­der the new Goods and Ser­vices Tax (GST) regime in­tro­duced in July. Prabhu said the gov­ern­ment was com­mit­ted to re­dress the prob­lems. “It is not a one-time ex­er­cise but an on­go­ing ef­fort. We will con­tin­u­ously re­visit is­sues, iden­tify chal­lenges and address them on a real-time ba­sis,” the min­is­ter said.

Ac­knowl­edg­ing that ex­porters had suf­fered due to prob­lems in GST im­ple­men­ta­tion, Prabhu said the gov­ern­ment would sort it out to­gether with ex­porters. “No new leg­is­la­tion can be made per­fect in one go. I ask ex­porters to bear with us and be our part­ners in deal­ing with the prob­lems,” he said, adding that a num­ber of prob­lems had al­ready been sorted out.

Ex­porters who were up­set by the drop in goods ex­ports in Oc­to­ber 2017, and were ex­pect­ing a fur­ther fall over the next few months due to lower duty draw­back rates (of in­put tax re­im­burse­ment) and slow re­funds, seem more op­ti­mistic now.

“The higher in­cen­tives should start re­flect­ing in ex­port num­bers from Jan­uary. How­ever, we are dis­ap­pointed that a num­ber of sec­tors were left out. Prob­lems for ex­porters ex­ist across sec­tors and the re­lief should have been for all,” said Ganesh Ku­mar Gupta, Pres­i­dent, FIEO.

The gov­ern­ment has also in­tro­duced a new, trust-based self-rat­i­fi­ca­tion sys­tem to al­low duty-free in­puts for ex­port pro­duc­tion on the ba­sis of self-dec­la­ra­tion.

With ex­ports of goods lower than $300 bil­lion in the last two years, the gov­ern­ment is un­der pres­sure to give the sec­tor a ma­jor boost. Ex­ports in 2016-17 were $276.54 bil­lion, com­pared with $314.14 bil­lion in 2013-14.

The growth in In­dian fash­ion and life­style mar­ket has given an im­pe­tus to the footwear in­dus­try as well. From a ba­sic need-based in­dus­try, it has be­come an evolv­ing fash­ion and style cat­e­gory.

Many In­dian and in­ter­na­tional play­ers, apart from in­tro­duc­ing their per­for­mance wear col­lec­tion have started pay­ing equal at­ten­tion to the ca­sual wear.

And this has helped In­dia be­come the sec­ond largest footwear pro­ducer in the world, with footwear pro­duc­tion ac­count­ing for ap­prox­i­mately 9 per cent of the global an­nual pro­duc­tion – 22 bil­lion pairs as com­pared to China, which pro­duces over 60 per cent of the global pro­duc­tion.

And one of those brands that has helped

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