subject: Texprocil Seeks Additional Sops For Textile Sector [print this page] In a bid to help the Indian garment sector overcome the prevailing crisis, the Cotton Textiles Export Promotion Council (TEXPROCIL) has appealed to the government to mull over the demands of the sector pertaining to extension of additional sops.
The Council has urged the government to reconsider its decision to levy tax on exports of cotton yarn and requested the latter not to withdraw the benefits made available to small units under the Duty Exemption Pass Book (DEPB) Scheme.
Tax imposition on exports of cotton yarn as well as withdrawal of DEPB scheme benefits, amid the crippling power shortage scenario and rising input costs, will further lead to erosion of margins of the SME-dominated garment manufacturing sector of India, said Krishna Kumar Maheshwari, proprietor of Badrivishal Textiles, a small-sized textile mill in Kolhapur, Maharashtra.
Shri Velayutham, chairman of TEXPROCIL, believes that introduction of tax on cotton yarn exports will impede investments on capacity expansion and have a negative impact on the downstream segments of the textile economy.
Undertaking capacity expansion has become imperative for garment manufacturing units in order to meet the resurgent market demand. However, tax on exports, amid rising production costs, will only add to woes of small-scale textile units, thereby limiting their growth, said Jeetendra Atal, proprietor of Raj Textiles, a small-sized garment manufacturer and exporter in Ahmedabad.
Given the stiff competition, the value-added garment sector is also under tremendous pressure to raise prices, thereby causing serious concern among the players, especially SMEs, in the sector.
