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February 19, 1999
Apparel exporters seek duty-free import of machinery to join the global markets
The Apparel Export Promotion Council has called for duty-free import of machines for dyeing, printing and processing the fabrics to improve the quality of Indian garments in international markets.
Also, the threshold limit of Rs 10 million under the Export Promotion Capital Goods Scheme must be scaled down to Rs 5 million, the AEPC said in a pre-Budget memorandum to Finance Minister Yashwant Sinha.
The import of machinery should be allowed at five per cent customs duty, five per cent special customs duty, zero per cent additional duty and four per cent special additional duty, as is the case with the leather industry.
The manufacturers and exporters of knitted garments have in-house facilities ranging from fabric-making to garment production including dyeing and printing processes. So they should be allowed to import machines for dyeing, printing and bleaching processes, the note said.
The note said garment exports rank as one of the largest foreign exchange earners for the country. With the World Trade Organisation's business regime coming into effect from January 1, 2005, it is expected that there would be free market in the textile trade. Its impact on readymade garment sector would result in stiff competition and market opportunities.
The AEPC said increasing competitiveness would require complete modernisation of the garment industry as well as supporting and ancillary industries like textiles, processing and trimmings/embellishments. ''Simultaneously, there would be a need to simplify and liberalise policy and procedures relating to export and import of this commodity.''
The note said the government must adopt a duty-free passbook scheme for garment exporters.
Besides, the limit of Rs 36,000 or ten samples may be made applicable on consignment basis and not on yearly basis as is applicable in the United States and Canada where samples valued at $ 800 and Canadian $ 500 are allowed to be imported.
It may be made applicable in case of imports by courier as well so as to cover import of garment samples, sample fabrics and sample trims.
Excise exemption made available on production of processed knitted fabrics of cotton should be extended to all other fibres, including the manmade variety.
The sanction to credit may be given immediately upon filing the application by an exporter and funds may be made available when required but within the overall credit sanctioned so that interest is paid only for the period that funds remain in an account.
These steps are essential to increase unit value realisation by exporters, besides boosting India's share in global apparel markets, the note concluded.
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