AEPC proposes measures to boost garment exports to $16 bn in FY'13

 Ahead of Foreign Trade Policy (FTP) to be announced in the first week of April, Chairman AEPC, Dr. A Sakthive, Tuesday submitted its proposal to Anand Sharma, Union Minister for Commerce, Industry & Textiles, has made submission for increasing the garment exports to USD 16 billion in 2013-14. 


The meeting was just before the finalization of annual supplement to FTP to be announced shortly. Dr. Sakthivel has proposed set of measures to boost the garment exports from the country; which includes detailed road map and changes in policy for duty credit scrip, issues related to overtime, changes in FTP for more making it more inclusive and flexible for garment exporters and manufacturers, recommendations on TUFs, custom duty and service tax. 

In his proposal Chairman AEPC has asked to allow duty credit scrip @ 5 percent of garment exports for the export performance in the year 2012 -13, for issuance of duty credit scrip from the year 2013 -14 and onwards. 

Chairman thanked Anand Sharma for removing excise duty on Fabric/Readymade garments.

Chairman proposed for encouraging garment exporters to accelerate in venturing manufacturing of garment of fabrics, both for knitwear & woven, which are not widely available in India and issuance of Duty Credit Scrip at the rate of 5 percent to garment exporters for the exports made from the year 2012-13 onwards in the 12th Five Year Plan Period on Actual User Basis. The Scrip will be used for offsetting custom duties on the specialty fabrics of textile. The issue of scrip shall be subject to actual user and non-transferable. 

Apparel exports from India are seasonal and primarily cotton based. Workers need to supplement their income to fight inflation and to get decent wage at higher levels. 

Chairman AEPC has demanded extra wages for overtime under section 59 of Factories Act 1948 is more than what is prescribed under ILO convention – it should not be more than 125 percent. The cap of 50 hours a quarter should be removed under section 64 of the Factories Act, 1948. In addition Chairman recommended modifications in Section 59- Where a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of his one-and-one quarter times of the regular rate.

On account of the proposal for Foreign Trade Policy Dr. Sakthivel has recommended that the scheme announced in FTP may be extended by 3 years up to the year 2015-16, so that exporters can plan their marketing strategies on long term basis.

Non-traditional markets needs to be tapped & to reduce the dependence on EU/USA, in this regard Chairman AEPC has proposed increase of duty scrip from 3 percent -4 percent to 5 percent for the non- traditional markets. In traditional countries like EU and US, duty scrip may be increased from 2 percent to 3 percent. Under Status Holder Incentive Scheme, the duty scrip may be increased from 1 percent to 2 percent. Expansion of Market Linked Focus Product Scheme to certain countries like Singapore, Turkey, Taiwan, Norway, Canada, Hong Kong, Russia, Switzerland, Korea, UAE, and Malaysia. Incremental growth achieved in Apr-Dec 2012 over Apr-Dec 2011 be qualified for incremental scrip. Thereafter the same benefit may be given for entire year till 2015-16 for the incremental growth achieved in previous year.

Early finalization of FTA with EU, to announce all the benefits in Foreign Trade Policy for the year 2013 -14 and 2014 -15 and 2015-16 (for three years), duty Scrip @ 5 percent on FOB value of exports to countries like Latin America, Australia and New Zealand, where freight charges to FOB are very high, Zero duty EPCG Scheme to be extended for the year 2013 - 14 to 2015 -16 are the other proposed measures submitted by AEPC.

A Strong infrastructure if the backbone of manufacturing and exports thereby. Chairman AEPC has with regard to TUFS Issues has asked for 8 percent interest subsidy for processing of Effluent (Effluent Treatment plants), 25 percent capital subsidy for process house, 50 percent capital subsidy for Effluent Treatment plants and old pending cases of TUFS to be taken up.