Incentives for handlooms

The labour intensive sectors which are mostly micro, small and medium enterprises (MSMEs) like handloom, handicraft, leather, sports goods etc have been provided with duty free entitlements with effect from July 1, 2017. With a view to expand employment opportunities, certain special focus initiatives for handlooms, handicraft, leather, marine, sports goods and toys sectors are required, Directorate General of Foreign Trade (DGFT) has said. These sectors are being provided certain duty free (only basic customs duty free with effect from 01.07.2017) entitlements. For this, a new para has been inserted in the Foreign Trade Policy 2015-2020 with effect from April 1, 2015.

For handlooms, duty free import entitlement of specified trimmings and embellishments up to 5 per cent of FOB value of exports during previous financial year has been included. Handloom and made ups are included for the entitlement. Duty free import entitlement of hand knotted carpet samples up to 1 per cent of FOB value of exports during previous financial year has also been included. For handicrafts, duty free import entitlement of tools, trimmings and embellishments up to 5 per cent of FOB value of exports during previous financial year is being provided. Entitlement shall extend to merchant exporters tied up with supporting manufacturers.

Handicraft EPC is now authorised to import trimmings, embellishments and consumables on behalf of those exporters for whom directly importing may not be viable. For leather and footwear, the new provision extends duty free import entitlement of specified items up to 3 per cent of FOB value of exports of leather garments during preceding financial year. Duty free entitlement for import of trimmings, embellishments and footwear components for footwear (leather as well as synthetic), gloves, travel bags and handbags up to 3 per cent of FOB’ value of exports of previous financial year will also be given.