The average tariff on Indian textile products in the EU and the US is higher compared to competing countries like Bangladesh and Pakistan, Minister of State for Textiles Ajay Tamta said in a written reply in Rajya Sabha. The US and the EU are top textile export destinations for India with share of 17 per cent and 15 per cent respectively. Indian textile exports to the US attract average tariff of 6.2 per cent, compared to 3.9 per cent for Bangladesh, 5.5 per cent for Vietnam, and 5.3 per cent for Pakistan, the Minister said citing ITC Trademap data.
Likewise, Indian textile exports need to pay average tariff of 5.9 per cent in the EU, while textiles from Bangladesh and Pakistan enjoy zero-duty, the Minister added. Bangladesh (with 10 per cent share), and China (6 per cent) are the third- and fourth-largest export markets for the Indian textiles. Pakistan, UAE, Vietnam, Sri Lanka, Brazil and South Korea are among the top 10 destinations for Indian textiles, according to data from the Directorate General of Commercial Intelligence & Statistics (DGCI&S).
In 2017-18, India’s overall merchandise exports stood at $303.38 bn, of which textile and apparel exports including handicrafts were valued at $39.22 bn, thus comprising 13 per cent of overall exports. To enhance exports of textile and apparel products, the Indian Government announced the Special Package for garments and made-ups sectors. The package offers Rebate of State Levies (RoSL), labour law reforms, additional incentives under Amended Technology Upgradation Fund Scheme (ATUFS) and relaxation of Section 80JJAA of Income Tax Act. Further, the rates under Merchandise Exports from India Scheme (MEIS) have been enhanced from 2 per cent to 4 per cent for apparel, 5 per cent to 7 per cent for made-ups, handloom and handicrafts w.e.f. November 1, 2017.
In addition, products such as fibre, yarn and fabric in the textile value chain are being strengthened and made competitive through various schemes, inter alia, Powertex for fabric segment, ATUFS for all segments except spinning, Scheme for Integrated Textile Parks (SITP) for all segments, etc. Assistance is provided to exporters under Market Access Initiative (MAI) Scheme. Further, Government has enhanced interest equalisation rate for pre and post shipment credit for the textile sector from 3 per cent to 5 per cent w.e.f. November 2, 2018.