Recently, Apparel Resources brought the Indian apparel industry’s attention towards the effects of weaker rupee that could affect the duty drawback rates. Taking note of the same, the industry is now demanding to increase them (duty drawback rates).
It is important to mark out that usually the announcement for All Industry Rate of Duty Drawback used to come in the month of September or October but this year it has not been announced yet.
We at Apparel Resources, pointed out that the government’s decision to bring down the duty drawback rates from 9 per cent to 2-3 per cent can backfire exporters and now when the rupee is starting to come down under Rs. 70, the benefits of rupee depreciation when it went to Rs. 74.34 against the US Dollar were also short lived.
Speaking on the issue, Raja M Shanmugham, President, Tiruppur Exporters Association (TEA) elucidated that it took almost one year for the apparel exporters to register positive numbers as compared to the corresponding year.
“During the half yearly period of current Financial Year, the total knitwear exports from our Country has fetched Rs. 26,056 crores as against Rs. 29,210 crores for the same time period in the previous year 2017-18, a decline of 10.8 per cent. Knitwear exports from Tirupur for the same six months period has declined from Rs. 13,600 crores to Rs. 12,100 crore , a negative growth of 11 per cent.” – Raja M Shanmugham, President, Tiruppur Exporters Association
He also added that the government has been delaying the announcement of the duty drawback rates, since the rupee has depreciated and this delay is hampering the exports.
Furthermore, the chairman urged the Union Finance Minister, Arun Jaitley that the duty drawback rates must be increased from 2.5 per cent to 4.5 per cent and aid the country’s apparel industry to enhance their exports.