Coming to the aid of the ailing textiles sector, Union Commerce Minister Anand Sharma on Friday announced a slew of sops including extending the Market Linked Focus Product Scheme (MLFPS) for exports and 2 per cent duty credit for exports to the U.S. and European Union from April 1, 2011 to March 31, 2012.
Mr. Sharma said subvention of 2 per cent on rupee export credit has been extended till March 2012 for handlooms, handicrafts, carpets and all small and medium enterprises. In order to extend the coverage of products under the Focus Product Scheme, he said it had been decided to include 130 new items, covering 10 product sectors, specifically including chemicals, pharmaceuticals, textiles, handicrafts, engineering and electronics sector which will get 2 per cent duty credit under the scheme. Chemicals such as soda ash, textile items like polyester yarn, woven cotton fabric denim, unbleached or bleached cotton fabrics, knitted and dyed cotton fabrics will stand covered under the scheme.
Mr. Sharma said the government had adopted a multi-pronged strategy by providing a stable policy regime, adopting a conscious market diversification plan and providing additional support to sectors hit badly by the global recession. “We encouraged technological upgradation of export sectors, and undertook simplification of procedures to reduce transaction costs. We decided to consolidate our traditionally strong sectors of economy while focussing on sunrise sectors as well,” he added.
“As the Textiles Minister, I have to also ensure that the commercial interests of textile exporters are protected and in my several interactions with the textile industry, including the one day on Wednesday, has highlighted that there is a serious concern on exports to the U.S. and the EU,” he said.
He said exports of items under Chapters 61 and 62 have shown a declining trend during 2010-11 as compared to 2009-10. Total exports to U.S. under Chapters 61 and 62 declined to Rs. 3,897.29 crore from Rs.6,129.69 crore and that to EU to Rs.7,869.02 crore from Rs.10,365.01 crore. “This sector has high potential to achieve higher level of exports and generate great employment opportunities. The U.S. and EU are also our major markets and these two countries are having their own myriad problems at present,” he added.
Items under Chapters 61 and 62 were granted duty credit under MLFPS for export to U.S. till September 30, 2010, and for EU up to March 2011. However, at present, readymade garments are not covered under FPS/MLFPS. It has been decided to extend MLFPS for exports to U.S. and EU under Chapters 61 and 62. The scheme would cover all the items covered under Chapters 61 and 62. Duty credit would be available to exports made during April 2011 to March 2012 at 2 per cent of f.o.b. value of exports.
Textile items such as polyester textured yarn, fully drawn yarn of polyester, viscose rayon type yarn, polyester chips, woven cotton fabrics denim 85 per cent cotton over 200G/M2, unbleached or bleached cotton fabrics, dyed cotton fabrics knitted or crocheted have been included under the scheme.
