In­dia's tex­tile ex­port in­dus­try gets a leg up with RoSL bud­get hike

Apparel Online - - India Canvas -

The Govern­ment of In­dia has marked up the Bud­get 2018 al­lo­ca­tion for ‘Re­mis­sion of State Levies’ (RoSL) scheme to

Rs. 2,163.85 crore from Rs. 1,555 crore – a 39 per cent in­crease over FY 2017-18.

The in­crease in RoSL along­side a Rs. 6,000-crore pack­age de­clared for the ap­parel and tex­tile in­dus­try in 2016 would give a fil­lip to tex­tile ex­ports from the coun­try, said Union Tex­tile Minister Sm­riti

Irani. Around Rs. 1,800 crore have al­ready been pro­vided to the in­dus­try as part of the pack­age, while a pay­ment of Rs. 300 crore is en­vis­aged for the cur­rent fis­cal, as she said.

The Minister fur­ther stated that the Tech­nol­ogy Upgra­da­tion

Fund Scheme (TUFS) out­lay in the bud­get has also been hiked by 15 per cent. No­tice­ably, the RoSL scheme is a ma­jor con­stituent of the afore­men­tioned pack­age that en­ables the ex­porters to off­set in­di­rect taxes charged by the states that are in­cor­po­rated in ex­ports. Im­por­tantly, the tex­tile ex­porters can claim RoSL on top of duty draw­backs and ad­di­tional in­cen­tives.

Ap­parel Online spoke to some of the key ex­porters to garner their re­ac­tion on the de­vel­op­ments and dis­cuss other re­lated is­sues as well. Laud­ing the Min­istry of Tex­tiles (MoT), Gurgaon head­quar­tered Ma­trix Cloth­ing’s Manag­ing Direc­tor Gau­tam Nair said, “The hike in RoSL funds in Bud­get

2018 will go a long way in eas­ing the pres­sure off the ex­porters, es­pe­cially the smaller ones who make up 90 per cent of our business.”

There was un­der-al­lo­ca­tion of RoSL funds in the last year’s bud­get which re­sulted in the non-pay­ment of re­fund claims. A lot of ex­porters have been fac­ing fi­nan­cial strin­gency due to locked-up funds and there is a need to ex­pe­dite the dis­burse­ment of RoSL ben­e­fits, he fur­ther added. Ex­press­ing his de­light on the move, Lud­hi­ana-based NG Ap­par­els’ Mar­ket­ing Direc­tor Ar­rpiit Gup­taa stated that it’s heart­en­ing to see the Govern­ment step­ping up its sup­port to bol­ster ap­parel ex­ports.

“The sec­tor is cur­rently un­der­go­ing dif­fi­cult times and the in­cre­ment in RoSL funds will pos­i­tively im­pact the en­tire value chain and will help grow In­dia’s share in global ap­parel ex­ports, which cur­rently is 1/5th of China,” he feels. How­ever, Gup­taa also ex­pressed his con­cern over the dwin­dling for­tunes of ap­parel in­dus­try of Lud­hi­ana, one of In­dia’s largest man­u­fac­tur­ing hubs.

While count­ing fac­tors like ris­ing wages, di­min­ish­ing mar­gins, un­pre­dictable weather, etc., re­spon­si­ble for the de­cline, he opines that in­crease in RoSL rates would def­i­nitely give some push to the sec­tor to en­dure this dif­fi­cult phase.

On the other hand, Nair at Ma­trix Cloth­ing rues that there is no pro­vi­sion for the in­crease in RoSL rates in this year’s bud­get. He no­ti­fied that there was a 3-month tran­si­tion pe­riod in 2017 wherein the old rates were ap­pli­ca­ble from July to Septem­ber and new rates came in Oc­to­ber. “The rates, in fact, have come down by al­most half (1.75%) of what was ear­lier (3.5%). We have been plead­ing the Govern­ment that this has se­ri­ously af­fected the ap­parel in­dus­try,” he tells. Apro­pos the ap­parel ex­ports fig­ures for Septem­ber-De­cem­ber 2017, Nair ob­served that there was a se­ri­ous de­cline on a Y-o-Y ba­sis and the sec­tor per­haps has not ex­pe­ri­enced such consistent de­cline in a long time. “This should be a huge con­cern for our in­dus­try and the coun­try. The ap­parel in­dus­try is very labour-in­ten­sive. If ex­ports go down so sharply and con­sis­tently, the em­ploy­ment will also go down,” he cau­tions.

Ap­par­els is a price-sen­si­tive in­dus­try, main­tains Gup­taa, adding that fur­ther sup­port from the Govern­ment will help im­prove the in­fra­struc­ture over the time and in­crease In­dia’s com­pet­i­tive­ness against ri­vals like Bangladesh.

The ap­parel manufacturers have to abide by the laws, ex­tend all ben­e­fits to their em­ploy­ees and still be able to pro­vide prof­itable pric­ing to clients. For this, they have to have the Govern­ment’s sup­port or else it is just a loss for all, he notes. “I urge MoT to de­sign new poli­cies to en­hance In­dia’s tex­tile and ap­parel in­dus­try com­pet­i­tive­ness vis-à-vis other coun­tries in the long term,” Gup­taa con­cludes.

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