Textile exporters' plea to Centre

Karur,Tamil Nadu, Aug 25 (UNI) The textile export industry here has urged the Centre to increase the duty drawback rates, remove Service Tax under all heads and give interest subvention of four per cent till March 2010 to help overcome crisis facing it.

In a memorandum to the Union Finance Minister, Karur Textile Manufacturer Exporters Association Secretary P Gopalakrishnan, a copy of which was made available to press here today, said the continued hardship it faced on various fronts made the industry more vulnerable than ever before.

The industry was the only segment in the manufacturing sector employing a large number of unskilled and semi-skilled workers displaced from agriculture.

During 2007-08, it suffered a lot when many units were closed owing to rupee appreciation. Then, the Centre announced a relief package by the way of interest subvention valid till March 2009.

However, all of a sudden, the government announced the interest subvention would cease to be effective from October one.

"We have come to know that some members of the committee for formulating the duty drawback rates recommended lower duty drawback rates and this has come as a bolt from the blue," he added.

Though the dollar was appreciating against the rupee, the textile industry had been facing huge problems since January 2008 as the yarn prices had gone up by 30 per cent accompanied by an increase in the prices of dyes and chemicals and 20 per cent hike in transport cost, labour charges and inflation.

The industry was finding it difficult to balance their production cost to get fresh contracts, he said.

Indian companies were unable to compete with China and Pakistan that have come out with relief packages to safeguard textile units in their countries from the raising production cost.

In these circumstances, he said, the reduced drawback and removal of interest subvention would threaten the survival of many units, he warned.

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