Garment companies want US sops to stay.

COIMBATORE/CHENNAI: While the annual supplement to the foreign trade policy has pleased the labour-intensive textile and leather sectors, garment makers want incentives being given for the US market to continue. "The 2% incentive given under market-linked focus product scheme (MLFPS) for knitwear exports should continue as the US market has not fully recovered," said A Sakthivel, president, Tirupur Exporters' Association.

Textile and apparel exports to the US, which account for over a quarter of the shipments made by the industry, started gaining pace from February after several months of decline. But industry officials insist that the growth has been robust as it came on a low base.

"The US economy is as fragile as any other (developed) economy and retail sales are not picking up. The recovery in the US market is neither fast nor sustainable," said D K Nair, secretary-general, Confederation of Indian Textile Industry (CITI). "The US and the EU face the same kind of problems and so the incentives should be available for both."

The Centre has extended the MLFPS incentive given at 2% of the free on board (FOB) value of exports for shipments made to 27 European Union (EU) countries up to March 31, 2011.

The commerce ministry has also announced that the zero duty export promotion capital goods (EPCG) scheme and the 1% status holders' incentive scheme till March 31, 2012. This, however, would not benefit the textile industry as the benefits are not available to those who have availed incentives under the technology upgradation fund scheme (TUFS), CITI's Nair said. "There is hardly anybody in the textile industry who has not availed TUFS benefits."

Source : timesofindia.indiatimes.com