New Delhi : Federation of Indian Chamber of Commerce and Industry (FICCI) has called for cheap export credit and income tax exemption for export earnings for India’s garments exporters.
At a meeting with Textiles Minister Dayanidhi Maran Wednesday, FICCI advocated credit for exporters at an interest rate of 7 percent, 100 percent exemption on income tax for export earnings for three years, initiation of skill development programmes, and reimbursement of duties to exporters.
“Textiles is the second largest employment generating sector in the country after agriculture and would require mission mode approach on a large scale to absorb 10 million people in the next five years,” said FICCI president Harsh Pati Singhania.
“Hence, the government’s skill development programmes need to be scaled up to train at least two million people in a year,” the chamber said in a statement.
India’s textiles exports to the US – its biggest market for garments – have fallen by around 14 percent in the first four months.
FICCI said that in view of the tough competition in the shrinking markets abroad, fringe benefit tax on marketing initiatives and travel abroad should be withdrawn.
“Exporters need to travel more frequently to their buyers under current circumstances,” it said.
The chamber also said duty drawback rates should be increased by at least 5 percent to ensure that all duties including local taxes are reimbursed to the exporters.
FICCI said that in the view of decreasing demand in traditional markets like the US and the European Union, the government should provide 100 percent risk coverage through the Export Credit Guarantee Corp for exports to South America and the Middle East.
While India’s exports to the US have declined, those of Bangladesh and Vietnam have increased by 12 percent and 5.2 percent between January and April.