'Reduction in duty entitlement passbook is a retrograde step'

The recent reduction in duty entitlement passbook (DEPB) rates announced by the central government is a retrograde step, which is likely to affect the exports considerably, says Powerloom Development Export Promotion Council (PDEXCIL).

A PDEXCIL press statement said that the reduction in the DEPB rates in respect of some items including textiles is as much as 45 per cent which is rather alarming.

Senthil Kumar, chairman of PDEXCIL, said that a steep reduction in DEPB rates without any corresponding reduction in customs duties on the inputs is quite unexpected. The reduction in DEPB rates will undo the advantages that would accrue on account of the removal of CENVAT on textiles, he said.

Kumar said that over 60 per cent of the fabrics produced are from the powerloom and handloom sectors of which 35 per cent are exported. "Exports are expected to decline with the reduction in DEPB rates and considerably affect these sectors," he said.

"The sharp reduction in the DEPB rates may lead to cancellation of export orders concluded based on the previous DEPB rates. This would affect the exports particularly with the phasing out of quota regime for textiles, shortly. The move to reduce DEPB rates is therefore untimely," he added.

APEDXCIL has therefore strongly pleaded to the government to maintain status quo and withdraw the reduction in DEPB rates.