Textile exporters point to sops in Bangladesh

Breaks sought on a par with competitors after quotas go

With the post-quota regime set to become operational from January 1, 2005, textiles exporters have asked the government to provide them export incentives at par with competing countries like Bangladesh to compete effectively in the international market.

"We have given the government a list of incentives which competing countries like Bangladesh provide to their exporters. These incentives include income tax rebate on export earnings and duty-free import of capital machinery. The government must consider granting us similar incentives," A Sakthivel, Chairman of the Apparel Export Promotion Council told Business Standard.

Bangladesh, a major competitor with regard to readymade garments, allows its garment exporters to retain in their respective foreign currency accounts the portion of their export earnings required for meeting the expenses on importing fabrics and other accessories through back-to-back letter of credit.

In addition to this, exporters of ready-made garments in Bangladesh are also allowed to import grey clothes.

Referring to the forthcoming National Foreign Trade policy, Sakthivel said that the council had recommended that garment exporters should be exempted from payment of education cess.

"As an alternate to this, we have proposed that the all Industry Duty Drawback rates could be enhanced by one per cent to nuetralise the incidence to education cess on exports," he said.

The council has also sought an increase in the entitlement for import of trimmings and embellishments from 3 per cent to 10 per cent.

The council has estimated that the country is unable to undertake export orders worth Rs 4000-5000 crore due to the limited availability of duty free trimmings and embellishments.

The APEC has also suggested that garment units in the domestic tariff area (DTA) should be accorded the same income tax treatment as that given to export oriented units or Export Processing Zones (EPZs) under section 10A and 10B, if the garment units export a minimum of 80 per cent of their production.