Business

New Incentives For Garment Exporters From September 20

In order to boost garment exports, the revenue department has started the process to operationalise the Rs 5,500-crore ROSL scheme from September 20, under which exporters will be compensated for state levies. Presently, exporters get only duty drawback on the central levies imposed during the process of manufacturing of goods for exports. In a first of its kind move, the Cabinet had cleared Rebate of State Levies (ROSL) on export of garments to refund the state levies which were not refunded so far. "The main objective of the scheme is to provide for remission of state levies in addition to the duty drawback scheme, through the scheme for ROSL on export of garments on an average basis only," the Central Board of Excise and Customs (CBEC) said in a notification.

In order to operationalise the above mentioned scheme, CBEC said the officers who are designated as Drawback DDOs at the respective Customs locations are to be designated as the DDOs for this scheme. As per a notification of the Textiles Ministry, ROSL scheme which came into operation from September 20, 2016, will remain in force for three years. The scheme is in line with the recognised economic principle of "zero rating" of export products and in recognition of the fact that at present only central levies are rebated by way of the drawback scheme, the Ministry said. The ROSL will provide for remission of state levies in addition to the Duty Drawback Scheme on export of garments on an average basis only. "The scheme aims to boost India's garment exports thereby facilitating augmenting of investment and creation of more employment in the garment sector," it said. The rebate will be disbursed from budgetary allocation of Ministry of Textiles using the Customs EDI System. Garment exports totalled US$ 1.45 billion in July, down about 5.2%, year-on-year.

Indian garment export value decreases by 5.2% in Q2, 2016

In the second quarter of 2016, India's garment exports fell 5.2% in dollar terms. The decline is mainly attributed to the declining exports to UK and US markets. In Q2, 2016, India's apparel exports to the US were 2.6% lower in value terms, compared to the same period of the previous year. Exports to the UK were down 6.6, to the Middle East exports fell 18.4%.

India's exports to Germany and France rose 13.7% & 5.8% respectively. Exports of MMF apparel were down 5%, for the first time, after rising consistently for the last two years. In the past five years, India's MMF apparel exports have grown 100%, while cotton garment exports decreased 15%.