Indian garment exporters welcome new budget

INDIA: Garment exporters welcome new budget

By Raghavendra Verma | 4 March 2013

Indian garment exporters have expressed relief after receiving the details of India's annual central government budget for 2013, after a feared increase in indirect taxes was not proposed.

Exporters worried about an increase in import duties for inputs and also excise duties on outputs that have to be reclaimed later for exports.

"We expected an increase in excise and customs duties, but there were none, so we are happy," A Sakthivel, chairman of the Apparel Export Promotion Council (AEPC) told just-style.com.

However, HKL Magu, managing director of Jyoti Apparels, told just-style.com that the industry was also expecting a reduction in interest rates, which did not happen. But, according to him it is a balanced budget.

In his speech in the Indian parliament on Thursday (28 February), finance minister Palaniappan Chidambaram announced the government will continue its Technology Upgradation Fund Scheme (TUFS) for another five years with an investment target of US$30bn. Its major focus would be the modernisation of India's power loom sector, upon which the government intends to spend US$500m during the next year.

Mr Chidambaram also announced a fund of US$10m for setting up apparel parks to house manufacturing units. This will, however, be within the existing scheme for integrated textile parks.

The locations of these parks are yet to be announced and Mr Magu said they should be near to the main cities: "It would be very difficult for exporters to shift their units if these parks are in remote areas."

A new initiative called the Integrated Processing Development has also been introduced to address the environmental concerns of the textile industry. With an outlay of US$100m, it is meant to help apparel and textile manufacturing units comply with environmental standards on affluent and chemical releases.

According to Chandrima Chatterjee, director of APEC'S economic and consultancy department, the apparel sector also welcomed the continuation of government benefits to medium, small and micro-scale clothing and textile units.

Sectors: Apparel, Manufacturing, Sourcing