Lok Sabha Question No. 4261 (UNSTARRED), answered on 2016-08-11
Subject: Textile Exports
Ministry: TEXTILES
Asked by: ANWHAR RAAJHAA

## LOK SABHA UNSTARRED QUESTION NO. 4261 TO BE ANSWERED ON 11.8.2016

## TEXTILE EXPORTS

## 4261. SHRI A. ANWHAR RAAJHAA:

Will the Minister of TEXTILES be pleased to state:

- (a)

वस्त्र मंरी

- the quantum of Textiles exports in the year 2015-16
- (b) the  scale  of  competition  in  textiles  from  countries  like  Bangladesh
- and Vietnam
- (c) whether the above said countries have access to developed markets at lower tariff; and
- (d) if so, the reasons therefor and the steps taken by the Government to make Indian textile industry more competitive in this regard?

## उत्तर

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

## (SHRI AJAY TAMTA)

- (a) India  exported  US$  39.9  billion  worth  of  textiles  and  apparel including handicraft during 2015-16.
- (b) India is facing stiff competition from countries like Bangladesh and Vietnam. Since 2011, textile  and  apparel  exports  from  Bangladesh and  Vietnam  has  increased  at  a  growth  rate  of  5%  and  9% respectively while India's export has grown by only 2%.
- (c)
- Yes Madam. The details are given in Annexure I
- (d) The developed countries extend preferential duties to various countries based on factors like LDC, bilateral relations, Free Trade Agreement (FTAs) etc.

In  order  to  increase  the  competitiveness  of  textile  and  apparel industry, Government has recently announced a package for apparel sector. The details of package are given in Annexure II

Bangladesh and Vietnam has access to EU, the biggest  market  for  textile and  apparel,  at  lower  tariffs  as  compared  to  Indian  textile  and  apparel products.

|            | Special Status   | Yarn   | Fabric   | Knitted Apparel   | Woven Apparel   | Home Textiles   |
|------------|------------------|--------|----------|-------------------|-----------------|-----------------|
| MFN Rate   |                  | 4.0%   | 8.0%     | 12.0%             | 12.0%           | 12.0%           |
| India      | GSP on           | 4.0%   | 8.0%     | 9.6%              | 9.6%            | 9.6%            |
| Vietnam*   | GSP**            | 3.2%   | 6.4%     | 9.6%              | 9.6%            | 9.6%            |
| Bangladesh | EBA*** - LDC     | 0%     | 0%       | 0%                | 0%              | 0%              |

*  Vietnam  has  signed  FTA  with  EU.  Duties  will  be  reduced  significantly  after enforcement of FTA.

After implementation of Trans Pacific Partnership (TPP) agreement, Vietnam will get preferential access to USA which is a significant importer of textile and apparel products.

**GSP:-  Generalised  System  of  Preferences  is  a  preferential  tariff  system extended by developed countries like EU to developing and least developed countries.

***EBA:- Everything But Arms is a special arrangements for least developed countries  which  grants  duty-free-quota-free  (DFQF)  access  for  all  their exports excepts arms and ammunition.

The Government has approved a 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

## 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.

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