With delays in getting export incentives under various schemes, textile and clothing exporters say they are unable to tap opportunities in the international markets and revival is taking time.
According to industry sources here, the Central Government offered incentives under two major schemes last year – Rebate of State Levies (ROSL) and Merchandise Exports for India Scheme (MEIS). Mid last year, the Government replaced the ROSL and MEIS with Rebate of State and Central Taxes and Levies (ROSCTL) scheme. It also offered an ad hoc, one-time special incentive of 1 % till December.
With sluggishness in textile and clothing exports, and yarn and fabric exports not covered under the new scheme, exporters sought continuation of MEIS and ROSCTL. The government allocated ₹ 9000 crore for ROSCTL. However, reportedly due to inadequate funds, the portal does not accept applications for ROSCTL since April this year, say sources.
Recently, the government introduced a new scheme called Remission of Duties and Taxes on Export Products scheme (RODTEP). This is supposed to be a comprehensive scheme for exporters. But, rates for this are yet to be fixed.
Currently, the industry gets only the duty drawback benefit. It should allocate adequate funds for ROSCTL or launch the RODTEP scheme at the earliest, says Raja M. Shanmugham, president of Tiruppur Exporters’ Association. The industry is already facing several hardships. Without the export incentives, revival takes time and the exporters are unable to tap the opportunities, he adds.
Chairman of Southern India Mills’ Association Ashwin Chandran says the export benefits should be extended to yarn too.
Pollachi Member of Parliament K. Shanmuga Sundaram said in a press release that the government should immediately allocate funds for ROSCTL and also continue the ad hoc one time incentive. “Textile industry is facing acute financial crunch due to the COVID-19 effect. Thereby the industry was forced to diversify its operations and also retain the garment manufacturing operation. The industry requires support from the Central Government,” he said.