India - Traders Seek Duty Sops for Knitwear Exports.

Tirupur Exporters Association (TEA) has urged the finance minister to increase the duty drawback rates to 10% so as to protect knitwear exports.

According to A Sakthivel, president of the association, the department of revenue, ministry of finance, while announcing the duty drawback rate for 2010-11 recently brought down the rate for cotton knitwear garments from 8.8% to 7.5%. It also reduced the value cap for knitwear garments.

“The announcement of reduction has come at a time when the knitwear exporters are anticipating the increase in drawback rates. Currently, the knitwear exporting units are facing a plethora problems like increase in yarn rates, dyeing charges etc. and more over, the 5% duty imposed on petro products has also increased the petro products prices and thereby transaction cost has gone up”, he said.

As such, due to adverse impact of the issues clouding the industry, the knitwear exporters have lost their competitiveness to competing countries, mainly China and Bangladesh and is struggling to sustain in the global market.

Meanwhile, another association of the textile industry, Texprocil, has expressed its disappointment at the reduction in drawback rates and non-restoration of drawback rate on export of cotton yarn. Amit Ruparelia, deputy chairman, Texprocil stated that at a time when the industry is grappling with rising input costs like cotton / cotton yarn and facing erratic supply of power and burden of service tax, reduction in the drawback rates was unjustified.

Source : yarnsandfibers.com