‘It is the only product not given benefit under foreign trade policy’

The Cotton Textiles Export Promotion Council (Texprocil) has appealed to the Union Government to include cotton yarn in the Interest Equalisation Scheme for pre- and post-shipment rupee export credit.

Council chairman K.V. Srinivasan has said in a statement that the Cabinet Committee on Economic Affairs (CCEA) recently approved the inclusion of merchant exporters in the scheme. Interest Equalisation Scheme at 5 % is available for pre and post-shipment credit on export of all products manufactured and exported by micro, small and medium-scale enterprises (MSMEs) and 3% on 416 specific tariff lines for non-MSMEs.

However, it had available only for manufacturer-exporters so far. In textiles, 35% to 40% of exports are through merchant exporters. The MSMEs constitute a significant part of the textile sector. But, they mostly depend on merchant exporters. The government had recently approved extending the scheme to merchant exporters and this would benefit the industry.

Further, the benefits are available for all types of fabrics, apparel, and made-ups. It should be made available for cotton yarn too. “Cotton yarn is the only product which has not been given any benefit under the foreign trade policy although it is a value added product,” he said.