Lok Sabha Question No. 70 (UNSTARRED), answered on 2019-02-04
Subject: Textile Exports
Ministry: COMMERCE AND INDUSTRY
Asked by: HARI BABU KAMBHAMPATI

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 70 TO BE ANSWERED ON  04 th  FEBRUARY, 2019

## TEXTILE EXPORTS

70. DR. KAMBHAMPATI HARIBABU

Will the Minister of COMMERCE & INDUSTRY ( वा ͨणÏय एवं उɮयोग मंğी ) be pleased to state:

- (a) whether it is  a  fact  that  serial  failures  to  negotiate  free  trade  agreements  and  the industry's dependence on duty drawbacks at the expense of innovation are causing the textile industry to lose out to neighbouring countries;
- (b) if so, the details thereof;
- (c) the remedial measures being considered to be taken to increase the exports in textile industry; and
- (d) the details of free trade agreements signed during the last five years?

## ANSWER

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THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SHRI C. R. CHAUDHARY)

- (a) & (b)   As per World Trade Organization's (WTO) systems,  the Least Developed Countries (LDCs) enjoy Generalized System of Preferences (GSP) because of which they enjoy duty advantage. In  view  of  this  India  faces  duty  disadvantage  upto  9.6%  vis-à-vis  other  neighbouring  LDCs. The global demand of textiles has also declined significantly between 2014-17 contributing to reduction of textiles exports from India.

Duty Drawback scheme rebates the incidence of Customs and Central Excise duties suffered on inputs used in manufacture of export goods. Duty Drawback scheme is not related to lack of innovations in the textile industry or its losing out to neighbouring countries.

- (c)     To increase exports of textile industry, Government announced a Special Package for garments and made-ups sectors. The package offers Rebate of State Levies (RoSL), labour law reforms, additional incentives  under  ATUFS  and  relaxation  of  Section  80JJAA  of  Income  Tax  Act.  Further,  the  rates under  Merchandise  Exports  from  India  Scheme  (MEIS)  have  been  enhanced  from  2%  to  4%  for apparel,  5%  to  7%  for  made-ups,  handloom  and  handicrafts  w.e.f.  1st  November  2017.  Products such as fibre, yarn and fabric in the textile value chain are being strengthened and made competitive through various schemes, inter alia, Powertex for fabric segment, Amended Technology Upgradation Fund  Scheme  (ATUFS)  for  all  segments  except  spinning,  Scheme  for  Integrated  Textile  Parks (SITP) for all segments, etc. Assistance is also provided to exporters under Market Access Initiative (MAI)  Scheme.  Further,  Government  has  enhanced  interest  equalization  rate  for  pre  and  post shipment credit for the textile sector from 3% to 5% w.e.f. 02.11.2018. The benefit which was limited to only manufacturers earlier has been extended to merchant exporters from 2019.
- (d)    During the last five years, no new Free Trade Agreements has been signed by India. However, the India- ASEAN Trade in Goods (TIG) Agreement has been expanded in November, 2014 to include

Services and Investment Chapter under the Agreement. Further India Chile PTA which was signed in March, 2006 has been expanded on 6 th September, 2016 and came into force with effect from 16 th May, 2017.

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