Lok Sabha Question No. 4283 (UNSTARRED), answered on 2016-08-11
Subject: Export of Garments
Ministry: TEXTILES
Asked by: OM PRAKASH YADAV, SUMEDHANAND SARASWATI

## LOK SABHA UNSTARRED QUESTION NO.4283 TO BE ANSWERED ON 11.8.2016

## EXPORT OF GARMENTS

## 4283.  SHRI OM PRAKASH YADAV: SHRI SUMEDHANAND SARSWATI:

Will the Minister of TEXTILES वस्त्र मंरी be pleased to state:

- (a) the details of the production and export of garments and textiles during each of the last three years and the current year;
- (b) the  country-wise  details  of  the  foreign  exchange  earned  through  exports during the said period;
- (c) the share of the country in the global export market of textiles and garments;
- (d) whether  the  Government  has  projected  annual  growth  rate  of  export  of textiles and garments for the next five years, and if so, the details thereof; and
- (e) the  steps  taken/proposed  to  be  taken  by  the  Government  to  increase  the export of textiles and garments; and the incentive/financial assistance being provided/proposed  to  be  provided  by  the  Union  Government  in  this  regard during the said period?

## उत्तर

## ANSWER वस्त्र मंरी ( श्री अज ) MINISTER OF STATE FOR TEXTILES

## (SHRI AJAY TAMTA)

- (a) The  details  of  production  and  exports  of  textile  and  garments  is  given  as under:-
-  Exports

| Year                 |   2013-14 |   2014-15 |   2015-16 |   2016-17 (Apr- June) |
|----------------------|-----------|-----------|-----------|-----------------------|
| Exports (In US$ Bn.) |      40.3 |      40.7 |        40 |                  8.85 |

Data Source: DGCIS

##  Production

| Category        | Unit       | 2012-13   | 2013-14   | 2014-15 (P)   |
|-----------------|------------|-----------|-----------|---------------|
| Fibre           |            |           |           |               |
| Raw cotton      | Lakh bales | 370       | 398       | 390           |
| Man-made fibres | Mn. Kg     | 1,263     | 1,307     | 1,344         |
| Raw wool        | Mn. Kg     | 46.1      | 47.9      | 48.1          |
| Raw silk        | Mn. Kg     | 23.68     | 26.48     | 28.71         |

| Category              | Unit         | 2012-13   | 2013-14   | 2014-15 (P)   |
|-----------------------|--------------|-----------|-----------|---------------|
| Yarn                  |              |           |           |               |
| Cotton Yarn           | Mn. kg       | 3,583     | 3,928     | 4,055         |
| Other spun yarn       | Mn. kg       | 1,285     | 1,381     | 1,433         |
| Manmade filament yarn | Mn. kg       | 1,371     | 1,293     | 1,248         |
| Total                 | Mn. kg       | 6,239     | 6,602     | 6,736         |
| Fabric                |              |           |           |               |
| Cotton                | Mn. Sq. mtr  | 33,870    | 35,513    | 36,959        |
| Blended               | Mn. Sq. mtr  | 9,283     | 10,062    | 10,449        |
| 100% Non-cotton       | Mn. Sq. mtr  | 19,639    | 17,925    | 17,868        |
| Total                 | Mn. Sq. mtr. | 62,792    | 63,500    | 65,276        |

Data Source: Office of Textile Commissioner

- (b) The country  wise  exports  of  the  foreign  exchange  earned  through  exports  of garments during the said period:
- (c) India has a share of 5% in the global trade of textile and apparel.
- (d) Government  has  set  a  target  of  US$  48.5  billion  for  exports  of  textile  and apparel for 2016-17. Over the next 5 years, India's textile and apparel exports is expected to increase substantially.
- (e) The  Government  has  announced  a  special  package  of  Rs  6,000  crores  for boosting  export  potential  of  the  Textile  and  Apparel  Sector.  The  details  of package are given in Annexure I. Apart from that Govt. has launched various schemes to boost textile and apparel exports. The details are given in Annexure II.

| Values in US$ Million   | 2013-14   | 2014-15   | 2015-16   |
|-------------------------|-----------|-----------|-----------|
| EU                      | 10,366    | 10,694    | 10,113    |
| USA                     | 7,408     | 8,064     | 8,450     |
| UAE                     | 3,007     | 4,159     | 4,780     |
| China&HK                | 4,441     | 2,819     | 2,158     |
| Bangladesh              | 1,935     | 1,983     | 2,097     |
| Others                  | 13,173    | 12,983    | 12,385    |
| Total                   | 40,329    | 40,702    | 39,984    |

The Government has announced a special package of Rs 6,000 crores for boosting the employment  generation  and  export  potential  of  the  Textile  and  Apparel  Sector.  Salient features of the package are:

## 1. Labour Law Reforms

- a) Government to bear 3.67% of employer's Employee Provident Fund (EPF) contribution  for  new  workmen  in  addition  to  existing  reimbursement  of  8.33% employer contribution under Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) for 3 years.
- b) EPF will be made optional for  employees  earning less  than  Rs.  15,000  per  month; thus, leaving more money in the hands of the workers.
- c) Overtime  cap  will  be  raised  from  50  hours  per  quarter  to  100  hours  per  quarter leading to increased earnings of workers.
- d) Considering  the  seasonal  nature  of  the  industry,  fixed  term  employment  will  be introduced for the garment sector. A fixed term workman will be considered at par with  permanent  workman  in  terms  of  working  hours,  wages,  allowances  and  other statutory dues.

## 2. Additional incentives under ATUFS

-  The subsidy provided to garmenting units, under Amended-TUFS, is being increased from 15% to 25%, providing a boost to employment generation.
-  The  package  breaks  new  ground  in  moving  from  input-based  to  outcome-based incentives;  a  unique  feature  of  the  scheme  will  be  to  disburse  subsidy  only  after expected jobs have been created.

## 3. Enhanced duty drawback coverage

-  In a first-of-its-kind move, a new scheme will be introduced to refund the state levies which were not refunded so far.
-  This move will greatly boost the competitiveness of Indian exports in foreign markets
-  Drawback  at  All  Industries  Rate  will  be  given  for  domestic  duty  paid  inputs  even when fabrics are imported under Advance Authorization Scheme.

## 4. Enhancing scope of Section 80JJAA of Income Tax Act

-  Looking at the seasonal nature of garment industry, the provision of 240 days under Section  80JJAA  of  Income  Tax  Act  would  be  relaxed  to  150  days  for  garment industry.

Government  of  India  has  launched  various  schemes  to  boost  competitiveness  of  Indian garment exported to foreign countries and to increase country's share in global markets. The details of the schemes are:-

- i. Merchandize Exports from India Scheme (MEIS): Rewards for export are payable as percentage  of  realized  FOB  value  to  all  the  countries.    The  reward  rates  are  given below:

| Eligible Products                                            | Reward Rate   |
|--------------------------------------------------------------|---------------|
| Textile and Apparel Products (HS Code 50-63: eligible lines) | 2%            |
| All handloom and handicraft items                            | 5%            |
| All jute, ramie and coir based items                         | 5%            |

The duty reward is available to textile and garment exporters in any country globally. Also,  Government has  withdrawn the requirement of  Landing Certificate to  avail  the benefit of MEIS. This removal of requirement of landing certificate is a major step in ease of doing business.

- ii. Interest Equalization Scheme: Pre and post shipment rupee export credit of 3% is given to Handicrafts, Carpet, Handlooms, Small &  Medium  Enterprises,  Readymade Garments, Made-ups, Fabrics, Coir & Coir Products, Jute & Jute Products.
- iii. Duty Drawback: Duty drawback rates for textile items are given below:

|                 | When CENVAT is not availed   | When CENVAT is availed   |
|-----------------|------------------------------|--------------------------|
| Cotton yarn     | 2.5-4.5                      | 1.2-1.4                  |
| Cotton fabric   | 4.3-7.3                      | 1.4-2.0                  |
| Man-made fabric | 6.6-11.5                     | 1.9-2.4                  |
| Apparel         | 7.2-10.5                     | 2.0-3.5                  |
| Home textiles   | 5.0-10.7                     | 1.9-8.9                  |

## iv. Market Access Initiative (MAI):

-  Financial assistance for carrying out marketing projects abroad
-  Assistance  for  building  capacity  for  exporters,  export  promotion  organizations, etc.
-  Assistance on  reimbursement basis to individual exporters for charges/fees paid by them for fulfilling the statutory requirements in the buyer country
-  Assistance for conducting studies
-  Assistance  in  developing  projects  leading  to  substantial  improvement  in  market access

## v. Market Development Assistance (MDA):

-  Financial support to exporters registered with Export Promotion Councils
-  For participation in Trade Fairs/Exhibitions, assistance would be permissible on travel expenses by air in economy class and/or charges of the built up furnished stall, subject to an upper ceiling as given below:
- o Focus Latin American Countries (LAC) - Rs. 250,000
- o Focus Africa, Focus CIS, Focus ASEAN - Rs. 200,000
- o General areas - Rs. 150,000
-  For each region, the exporter can claim benefit once a year
-  Maximum number of permissible participations shall be 5 in an FY.

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