The Union government might consider more incentives for textile exporters, to bridge the gap between costing of products originating from the world’s least developed countries and India. Under the global preferential treatment rules, textiles imported from countries such as Bangladesh, Pakistan and Vietnam are preferred over those from India. Earlier extension of lower import duty in developed countries including America, to Indian exporters, is no longer valid. Reason: growing size of Indian economy — it has crossed the threshold size and became the world’s six largest economy in 2017.
The total in differential duty works out to nearly 9 per cent between products from India and the other smaller economies. With the present incentives offered by the government and the rupee’s recent depreciation, the total duty differential works out to 5 per cent, on which the government announced a two per cent export incentive under the Merchandise Exports from India Scheme.
The US government has complained about the Indian incentives at the World Trade Organisation (WTO), as legally unsustainable. WTO has set up a committee on the issue.
Under the package, MSMEs registered under the goods and services tax will get a two per cent interest rebate on incremental loans up to Rs 10 million. A web portal has been launched through which such units may avail of loans up to this size. The segment accounts for about 45 per cent of the sector’s manufacturing output and around 40 per cent of export.