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From the President’s Desk…..
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My Dear Fellow Exporters,
I heartily welcome the Cabinet decision to abolish Textile Committee Cess. Abolition of the Cess will not only augment the competitiveness of Indian garment exporters, but also help remove procedural bottlenecks and thus reduce transaction cost and time for them. The Cess at about 0.05% of the FOB value was merely symbolic and its abolition shows the government’s commitment to insulate exports from all kinds of taxes and duties. Textile Committee Cess was introduced some three decades ago with a view to controlling the quality of garments and other textiles. The Cess lost its relevance after the withdrawal of quota restrictions and ever since the textile industry had been clamouring for its abolition. The Cess was being used for funding the activities of the Textile Committee. The industry was also of the view that the Cess amount collected so far was several times higher than the funding requirements of the Textile Committee and even the interest on excess funds collected was more than sufficient to fund all the current activities of the Committee. So I must say that the government has taken the right decision by abolishing the Cess for garment exporters but I believe other textile exporters also deserve a similar treatment.
I also thank our Hon’ble Commerce & industry Minister, Mr. Kamal Nath for his sustained commitment to help textile export industry. His announcement that "the Government is positively inclined to extend Technology Upgradation Fund Scheme (TUFS) for the textile sector beyond March 2007," has brought a sense of relief for textile exporters, especially the small and medium exporters, who are planning to modernise their plant and machinery in order to take on the challenges emerging after withdrawal of quota restrictions. TUFS supports modernization of textile sector which contributes 12% to the export basket and accounts for 4% of the country’s GDP. The textile sector is also a major source of employment generation in the country. Unfortunately, however, the export statistics available for October-November last year reflects a decline in textile exports to US by 4.8% against the same period in the previous year. India’s exports to non-EU countries have also recoded a decline by 11.02% during January-October 2006 against the same period in 2005. On the other hand, textile exports from Bangladesh, Indonesia, Vietnam & Cambodia have recorded phenomenal growths of 34.22%, 21.27%, 51.69% and 19.67% respectively during these periods. In this grim scenario, the government’s will to extend TUFS will help arrest the decline in our textile exports to some extent, but larger efforts are needed on the part of the government to help our textile export industry regain the glory of the past.
Yours sincerely,
Ganesh Kumar Gupta
PRESIDENT
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