GEA’s pre-budget appeal to make exports competitive

Garments Exporters Association (GEA) has forwarded

its Pre-Budget recommendations to the Ministry of Finance, to make the export sector more competitive. In its appeal, Rakesh Vaid, President, GEA has stated that the basic objective of the Budget should be to make exports competitive and profitable. This is because rising input costs, tight liquidity conditions with steep hike in interest rates, lack of business confidence because of uncertain political conditions along with other adverse global and domestic conditions have reduced the competitiveness of Indian garment exporters, who are finding it difficult to steer their ship in rough global weather.

The garments exporters are hoping to get some fiscal relief from the forthcoming Budget to help them overcome the present crisis because of very slow recovery of the global economy. Vaid hoped the Pre-Budget recommendations would receive favourable consideration of the FM.

In its appeal, GEA has asked for reduction in transaction cost apart from necessary fiscal and commercial relief for the garment sector to enable it to face increasing international competition; it has also asked for adequate and need-based funds to exporters at reasonable interest rates which should not exceed 7 per cent as applicable to agriculture sector; restoration of 2 per cent interest rate subvention on export credit to all garments exporters irrespective of their turnover and scale of operation covering all units in small, medium and large category.

The proposal further adds propositions like hike in duty drawback rates by 5 per cent by increasing the scope and coverage of duty drawback scheme to ensure full reimbursement of excise duties, custom duties, education cess and various state level taxes; 100 per cent restoration of exemption to export earnings under Section 80 HHC of IT Act; captive power generation by providing diesel at international prices, which are exempted from excise duty and local levies; abolishment of custom duty on import of textiles machinery, accessories and fabrics; simplification of administrative procedures to avoid delays at customs clearance of goods by improving loading and unloading of cargo and infrastructure at ports.