Top office bearers of a Mumbai-based top textile trade body recommend that the Foreign Trade Policy (FTP) should offer logic-based incentives as opposed to lobbying-based, but strictly in accordance to the stated objectives.
This, they add, will substantially increase India’s exports and net foreign exchange earned besides creating hundreds of thousands of additional jobs without increasing the overall outflow of incentives.
Office bearers of TEXPROCIL led by Mr Manikram Ramaswami – Chairman, Mr RK Dalmia - Deputy Chairman, Mr Ujwal Lahoti - Vice Chairman, Mr S Rajagopal – Executive Director and also Ms. Kiran Soni, Textile Commissioner, said this while addressing a press conference held in Mumbai yesterday.
According to these top TEXPROCIL officials, the FTP is framed on four broad objectives; maximize India's forex earnings for a given incentive outflow; create maximum number of jobs for a given incentive outflow; incentivize exports of products / commodities that has head room to grow; incentives should increase exports and not merely add to the bottom line of exporters and incentives should offset the extra freight costs incurred while exporting to distant markets.
“On all four points, textile exports, be it yarns, fabrics or apparels deserve higher incentives than engineering exports and electronic assembled products, etc. as textiles has near zero import content, against 25% to 90% import content in the above mentioned products”, they said.
They added, “Textiles create 10 to 20 times more jobs than these non-textile goods and that too, in tier III & IV towns for unskilled persons of both sexes. Share of Indian textile exports in global textile trade is around 10%, which leaves headroom of 90% growth, should Indian exporters become price competitive and displace competitors from the neighbourhood.
“Textiles have lower FOB value and therefore suffer higher logistic costs in percentage terms and therefore deserve a higher percentage as Focus Market incentives to offset the extra freight cost than other non-textile products. However, the reality is that the FTP is not implemented as per stated objectives and textiles enjoy lowest instead of highest incentives.”
They conclude by saying, “Following the policy with a logic of giving higher incentives where there is a lack of level playing field will go a long way to increase India’s exports".