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As we near the end of the F.Y. 2020-21, we need to take a stock of the country’s export situation. The year gone by has been challenging on account of subdued global economic outlook, disrupted supply chains and overall depressive demand scenario in the international markets. While on the one side there have been reports of significant improvement in export order bookings, the trade and industry has also reported a 25-27% rise in the input costs ranging from raw material, labour, packaging material, transportation, ocean freight, etc.
Export of Cotton Textiles
As per the quick estimates released by Ministry of Commerce, exports of cotton textiles reached a level of USD 948 million in February 2021 marking a growth of 9.41 per cent against the corresponding month of February 2020, wherein exports were valued at USD 866 million.
Exports of cotton textiles during the period April – February 2021 have thus shown a decline of (-) 6.53% reaching a level of USD 8.71 billion over the previous year. The decline of 6.5% is mainly due to steep declines in April/May 2020 owing to lockdowns imposed across the world including India. Exports of cotton textiles have shown positive growth in the subsequent periods and are expected to gain positive trajectory in the coming months.
Meeting with Government Officials
Ø Virtual Meeting with the O/o. Hon’ble Prime Minister of India
A virtual meeting of Joint Secretary to Hon’ble Prime Minister Shri Arvind Shrivastava was held on March 23, 2021 with Shri B. K. Goenka, Chairman of Welspun India Ltd., Shri Harish Ahuja, Managing Director of Shahi Exports, Dr. A. Shaktivel, Chairman of AEPC, Shri Gautam Nair, Executive Committee Member of AEPC, Shri Chintan Thaker, Chairman, ASSOCHAM (Gujarat Chapter) along with myself and Executive Director representing TEXPROCIL.
As we are all aware, the RoSCTL scheme for Made ups & Garments has been extended till 31.3.2021. The notification dated April 17, 2020 issued by Ministry of Textiles stated that, “the Government has decided to continue the RoSCTL Scheme w.e.f. April 01, 2020 until such time that the RoSCTL Scheme is merged with Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme without any change in Scheme guidelines and rates (as notified earlier)".
As both the RoSCTL and RODTEP schemes refund similar types of duties / taxes / levies, therefore, a request was made to the government to announce the same RoSCTL rates (as notified earlier) for Made ups and Garments under the RODTEP scheme. In this regard, a detailed presentation was made which was well received by all those present in the meeting. We await a favourable consideration of our request made to the government.
Ø Virtual Meeting with Hon’ble Minister of Commerce & Industry and Railways
A virtual meeting Chaired by Shri Piyush Goyal, Hon’ble Union Minister of Commerce & Industry and Railways on issues of export interest and ITC (HS) chapters was organised by O/o DGFT with EPCs and Commodity Boards on March 22, 2021.
The meeting was attended by the Vice Chairman and the Executive Director of the Council. At the meeting Shri Sunil Patwari, our Vice Chairman requested the government for removal of 10% duty imposed on cotton imports comprising 5% Basic Customs Duty (BCD) and 5% Agriculture Infrastructure Development Cess (AIDC) as it would result in imports of ELS cotton varieties like Egyptian Giza and the US Pima that are being used for value added exports becoming expensive.
The other points made during the meeting included:
· To engage in a dialogue with the shipping lines so that they take suitable steps to make available adequate number of containers to the exporters and also to ensure that there are no steep and abrupt increase in the freight rates.
· To notify the same RoSCTL rates for Made ups under the RODTEP scheme since the duties / taxes / levies are similar under both the schemes.
· To dispense with the requirement of maintaining the average export performance (AEP) under the EPCG Scheme.
· To introduce an Error correction provision for Errors Committed by exporters while filing EDI Shipping Bills.
Ø Webex Meeting with Ministry of Commerce
A webex meeting chaired by Shri Amitabh Kumar, Joint Secretary (EP-Textiles Division), Ministry of Commerce was held on March 11, 2021 to discuss textile export-related issues. The Council drew attention to the difficulties faced on account of container shortages at ports which were seriously affecting export shipment. The issue relating to steep increase in freight rates was also highlighted along with other issues like withdrawal of Customs duty on Cotton imposed in the Union Budget for 2021-22, and notifying the RODTEP rates at the earliest for Cotton textiles products such as Made ups / Garments, Fabrics and Yarn.
The UK is India’s 14th largest trading partner accounting for USD 8.7 billion of exports and USD 6.7 billion of imports. The Ministry of Textiles has sought more favourable access for textile and clothing under the proposed trade pact with the UK so as to give a fillip to our exports even as our competitors have been granted duty free access. It has been pointed out that the UK has extended GSP benefits to 47 Least Developed Countries (LDCs) including Bangladesh and Pakistan on the lines of EU GSP which leaves India with a tariff disadvantage.
In a recent development, the Ministry of Commerce & Industry has proposed to the UK that the two countries could work on an interim pact based on a preferential basis by which both sides would reduce or eliminate tariffs on select items.
In our view, the tariff reduction in textile and clothing items could definitely result in possible gains for the sector and government should continue negotiations with the UK taking this into account. The Council is also pursuing with the government for negotiations with the markets of the EU and UAE.
India-Brazil Virtual BSM
To understand the potential and requirement of textiles from India, Texprocil with support from the Consulate General of India in Sao Paulo organised a virtual Buyer Seller Meet (BSM) between India and Brazil on 11th March 2021.
The virtual BSM event was inaugurated by the Consul General of India, Sao Paulo, H.E. Shri Amit Kumar Mishra who highlighted the bilateral trade between the two countries in his opening remarks and congratulated the Council for organising the virtual BSM event in the absence of any physical events due to the COVID situation.
In my welcome remarks at the event, I thanked the Consul General as well as the Guest Speaker Mr Luiz Roberta Rando from Sinditecidos SP a Brazilian Textile Association, for their support. Other Associations like The Brazilian Association of Textile Retail (ABVTEX) and Sindtex Blumenau also supported the event. Dr. Siddhartha Rajagopal, Executive Director of Texprocil gave an overview of the activities of Texprocil and also highlighted the strengths of the Indian textile industry.
11 Indian suppliers participated from Indian side and made a short video presentation of their companies which was played with a voice dub done in Portuguese. Around 50 Brazilian buyers who were present at the inaugural session were provided with the video presentations & corporate profiles of each Indian company. The B2B meetings are currently in process between individual Indian supplier and Brazilian buyers.
Friends, the challenges that we face today and the extraordinary situation is expected to fade away as the overall trade normalises gradually and economies start getting back on track. Accelerated transformations such as continued efforts to improve digitalisation, improve ease of doing business, create favourable conditions for global trade and dedicated investments in improving infrastructure are expected to propel India’s export-import trade in the medium to long term.
In this context “One District One Product” (ODOP) Scheme would also decentralise export promotion activities by creating “centres of excellence” at the local levels. This augurs well for coordinated development of export production at the unit level.
Despite the numerous challenges, how the industry overcomes the pandemic blues and focuses on making solid strides in developing trade will determine the span of time it would take to return back to normalcy.
:: TEXPROCIL ::