The Cotton Textiles Export Promotion Council (Texprocil) today said it has asked the ministry for higher incentives including 5 per cent duty reduction for exports to China.
"To boost cotton textile exports to China and Europe, we seek higher incentives. We have urged the ministry to seek 5 per cent duty reduction from the present 10 per cent for our fabrics and home textiles," Texprocil Chairman Manikam Ramaswami told reporters here.
Pakistan allows duty free import of textile machines from China and in return enjoys duty free access to fabric market in China.
China is the largest textile country, accounting for 30 per cent of global trade. China imports over USD 20 billion worth of cotton textiles of which India's share is only USD 3.5 billion, Ramaswami said.
India has a USD 32 billion trade deficit with China, in which USD 12 billion worth of imports are allowed to come into India either duty free or at concessional duties. India on the other hand has not obtained any reciprocal benefit.
The incentive will help us to put another USD 7 billion worth of fabrics and home textiles into China and reduce our trade deficit of USD 32 billion with China, he said.
Texprocil hopes to achieve exports target of USD 13.5 billion in FY 15 from USD 11.8 billion in FY 14.
Despite local cotton prices ruling 10 per cent higher than international prices and slow down in exports in June quarter, Texprocil hopes to achieve exports target of USD 13.5 billion in FY 15 from USD 11.8 billion in FY 14, he said.
The cotton textiles registered negative growth of 4.95 per cent at USD 2,461 million in quarter ended June, 2014.
Among others, yarn exports also showed negative growth of 13.15 per cent and made up 6.73 per cent in the June quarter due substantial jump in local cotton prices.
Indian cotton prices remained higher than international cotton prices since February. With cotton prices higher than international prices - 70 per cent of its sale value of yarn is cotton cost - it is extremely difficult even for the highly efficient spinning sector to export its products, Ramaswami said.
"The home textile exports also got impacted as our main competitor Pakistan in our main market (EU) gained zero duty access, against 9.6 per cent customs duty for products from India," he added.
