Textile Min to approach Fin Min and Commerce Min to restore incentives for cotton yarn
Updated: Oct 12, 2013 03:01:40pm
Mumbai, Oct 12 (KNN) The Textile Ministry will approach the Ministry of Commerce and the Finance Ministry for withdrawing the decision to remove the focus market scheme (FMS) for cotton and cotton yarn.
“I will be writing to the Commerce Ministry in this regard. It withdrew FMS, which was given to cotton and cotton yarn exporters, and it was based on the belief that we have already got surplus production in this country. So, they must have thought that it is not necessary,’’ said Textile Minister KS Rao yesterday, to reporters on the side-lines of a FICCI conference.
The objective of the FMS was to offset the high freight cost and other disabilities to select international markets with a view to enhancing export competitiveness.
It allowed a duty credit of 2.5 per cent of free-on-board value of exports to countries that are identified as focus markets by the government. The duty credit may be used for import of inputs or goods, including capital goods.
The government has imposed quantitative restrictions on the exports of cotton and cotton yarn.
Exporters can apply for registration certificate (RC) for a maximum quantity of 30,000 bales or actual quantity exported in the previous cotton season, whichever is less. One bale contains 170 kg of cotton.
Rao, however said, the Current Account Deficit (CAD) is a major issue. To address this, exports have to be increased in order to bring in more foreign exchange in the country. Therefore, the Commerce Ministry should encourage textiles exports.
Latin America and Africa came under focused markets for cotton yarn exports scheme. The scheme was withdrawn last month. The withdrawal was expected to impact cotton yarn exports in a big way.
The scheme was initially started to increase India's competitiveness and allowed a duty credit of 2.5 per cent of free-on-board value of exports that came under FMS.
Peru sources 90 per cent of their cotton yarn from India and with this restriction coming into play India will lose its competitive edge and lose out on the pricing power, reports media.
Also, incremental exports which are around 25 to 30 per cent of India's total cotton yarn exports have also been withdrawn which also have a bearing on India's cotton yarn exports.
Due to this the total impact is estimated to be around 35 per cent on total cotton yarn exports. (KNN/SD)
“I will be writing to the Commerce Ministry in this regard. It withdrew FMS, which was given to cotton and cotton yarn exporters, and it was based on the belief that we have already got surplus production in this country. So, they must have thought that it is not necessary,’’ said Textile Minister KS Rao yesterday, to reporters on the side-lines of a FICCI conference.
The objective of the FMS was to offset the high freight cost and other disabilities to select international markets with a view to enhancing export competitiveness.
It allowed a duty credit of 2.5 per cent of free-on-board value of exports to countries that are identified as focus markets by the government. The duty credit may be used for import of inputs or goods, including capital goods.
The government has imposed quantitative restrictions on the exports of cotton and cotton yarn.
Exporters can apply for registration certificate (RC) for a maximum quantity of 30,000 bales or actual quantity exported in the previous cotton season, whichever is less. One bale contains 170 kg of cotton.
Rao, however said, the Current Account Deficit (CAD) is a major issue. To address this, exports have to be increased in order to bring in more foreign exchange in the country. Therefore, the Commerce Ministry should encourage textiles exports.
Latin America and Africa came under focused markets for cotton yarn exports scheme. The scheme was withdrawn last month. The withdrawal was expected to impact cotton yarn exports in a big way.
The scheme was initially started to increase India's competitiveness and allowed a duty credit of 2.5 per cent of free-on-board value of exports that came under FMS.
Peru sources 90 per cent of their cotton yarn from India and with this restriction coming into play India will lose its competitive edge and lose out on the pricing power, reports media.
Also, incremental exports which are around 25 to 30 per cent of India's total cotton yarn exports have also been withdrawn which also have a bearing on India's cotton yarn exports.
Due to this the total impact is estimated to be around 35 per cent on total cotton yarn exports. (KNN/SD)
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