Duty drawback for cotton-MMF blends

The Indian Government has notified certain changesin the All Industry Rates of Duty Drawback vide Circular No. 06/2016-Customsdated February 9, 2016. These changes are effective from February 11, 2016. Newentries in the Drawback Schedule have been created for cotton yarns mixed withMMF – both grey and dyed. “I am glad the Government has accepted our proposalfor a separate entry for Cotton Yarn mixed with MMF”, said RK Dalmia, Chairmanof The Cotton Textiles Export Promotion Council (TEXPROCIL). The Government hasalso increased the Drawback caps in the case of certain MMF fabrics.

Dalmia appreciated the Government for considering thefeedbacks on the Drawback rates and anomalies that have arisen under theDrawback Schedule and addressing them. However, Dalmia pointed out that in theproduct coverage there are some clarifications needed with regard to theclassification of some high valued items like “Boiler Suits” and “Protectivewear made of blend containing cotton and manmade fibres” which are technicaltextiles products for which the market is growing.

On the 3 per cent Interest Equalization Scheme, Dalmiacomplimented the Government for initiating necessary steps to implement thescheme smoothly as the problems faced initially by some of the exporters ingetting the benefit from their banks have been largelyresolved.

With regard to exports of cotton textiles, Dalmia pointedout that even though Indian cotton textiles products were competitive in theworld markets, preferential access being given to some of India’s competingnations like Bangladesh, Cambodia, Pakistan, South Korea, Turkey and Vietnam bymajor importing countries like the EU besides discriminatory import duties onIndian textiles in important marketslike China, Turkey and Canada areseverely affecting exports.

To provide a level playing field, Dalmia urged theGovernment to fast track the conclusion of FTAs with EU, Australia and Canadato remove trade barriers and gain market access to these leading countries. TheChairman, TEXPROCIL also urged the Government to initiate dialogue with Chinaand Turkey for reduction in the import duties imposed by these countries onIndian textiles.