FIEO Regional Chairman Dr. A Sakthivel on July 25, 2015 met the Hon’ble Union Minister of Commerce
and Industry Smt.Nirmala Sitharaman at Coimbatore and submitted a
representation to address the export related issues and discussed the
strategies for the growth of Readymade garment exports.
After hearing all our requisitions, the Hon’ble Minister
said 3% Interest Subvention would be announced soon and was also very positive
in implementation of FTA with EU. FIEO Regional Chairman was accompanied by leading status holder
members of FIEO Southern Region
FEDERATION OF INDIAN EXPORT
ORGANISATIONS
SOUTHERN REGION
July 25, 2015
Smt. Nirmala Sitharaman
Hon’ble Minister ofState for Commerce & Industry (Independent
Charge)
Ministry of Commerce &
Industry,
Government of India
Udyog
Bhawan,
New Delhi-110011
Respected Madam,
SUB
: REQUISITION TO ADDRESS THE EXPORT
RELATED ISSUES –REG
***
We would like to thank the Hon’ble
Union Minister of Commerce and Industry for taking measures to turn back the
declining exports for the past seven months and discussing with industry to
find ways to enhance exports and also explore new markets. The competitiveness
is the buzzword to sustain in the Global market and by addressing the concerns
of the exporters, we could sustain in the existing markets and also make inroad
into the potential markets.
We give below some of our
requisitions like FTA, CEPA and CECA with EU, Canada and Australia respectively
and once the Agreements are implemented, we could double our exports in next
three years and provide more employment, particularly women workers.
FREE
TRADE AGREEMENT WITH EU
Madam,
the Hon’ble Prime Minister’s vision of “Make in India” is apparently fulfilled
by the Readymade Garment Sector as the sector is using only a minimal inputs
from imported items and the entire production is taking place in India and also
providing employment to lakhs and lakhs of people mainly women workers, semi
literate hailing from
rural areas. It is to be noted that the garment sector has totally exported RMG worthUS $ 16.82 Billion in 2014 – 15
and out of this, US $ 7.23 Billion value of garment was destined to European
Union and is still having the potential to enhance exports in European
Union once the level playing field is provided to the sector.
We are
happy to note that over a period of time, the business relations with European
buyers have improved quit a lot and repeated orders have become norms for most
of the garment units. Moreover, the garment
exporting units have also elevated their strength to fulfill the customers
stringent quality requirements.
We wish to
note that currently, our main competing country Bangladesh, as a least
developed country status, is now
enjoying the duty free market in European Union and has exported about US $ 15
billion in 2014 -15 to EU market alone, more
than double of our garment exports.We
are confident that we could dent the market share of Bangladesh once
Free Trade Agreement is implemented with an additional advantage of being Compliances
oriented factories in our end.
COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT (CEPA)
WITH CANADA
We are
happy to note that during our Hon’ble Prime Minister’s visit to Canada in April
2015 a statement was issued at a joint press conference with Canadian Prime
Minister Mr.Stephen Harper in Ottawa that India would implement the roadmap to
conclude the Comprehensive Economic Partnership Agreement (CEPA) by September
2015.
We wish to note that in 2013 -14, the
total Readymade garments exports from our Country to Canada was Rs.1,493 Crores
and in last financial year 2014 – 15 the export was more or less maintained in
the same level and recorded Rs.1,482 Crore with a market share of 3.2% only.
In
Canada our competing countries like Bangladesh and Cambodia are entitled to the
least developed countries tariff treatment while Pakistan and Vietnam also
continue to get benefit under General Preference Tariff(GPT) even after 1st
January 2015 and after imposition of normal customs duty about 20% for our
garments in Canada, we have lost our competitiveness in Canada, as our
competing countries continue to enjoy the lower duty.
We
were doing a significant amount of exports to Canada, a promising market
earlier, and over the period of years,
our exports have come down drastically and we are now doubtful about our
survival in the huge Canada market after loosing the competitiveness. We are confident that after
having CEPA, we could compete with these countries effectively and increase our
market share.
We request the
Hon’ble Minister to expedite for Comprehensive Economic Partnership Agreement
(CEPA) with Canada a promising market for knitwear exporters and help for
enhancing knitwear exports to Canada.
COMPREHENSIVE ECONOMIC COOPERATION AGREEMENT (CECA)
WITH AUSTRALIA
We
wish to note India and Australia aim to conclude the Comprehensive Economic Cooperation
Agreement (CECA) by December 2015, following a renewed push to the pact
months after our Hon’ble Prime Minister visit to Australia.
We wish to note that in 2013 -14, the total Readymade garments exports
from our Country to Australia was Rs.707 Crores and in last financial year 2014
– 15 the export was increased to Rs.881 Crores with a growth of 25%.
As there
is a good scope for enhancing our market share, we request the Hon’ble Minister
to ink CECA with Australia by December 2015.
MERCHANDISE EXPORTS SCHEMES FROM INDIA
We would
like to thank the Hon’ble Minister forinclusion of European Free Trade
Association (EFTA) States, Norway, Switzerland, Iceland, and Liechtenstein from country group C to
country group A and make them eligible for MEIS reward rate at 2% of FOB value
of exports. This will help to increase our competitiveness in these countries.
In similar line, we also request the
Hon’ble Minister to include a few more countries like South American countries,
South Africa, Russia, Australia and Newzeland, under MEIS
reward rate where Readymade garment export is taking place to these countries
and moreover, the transportation cost is on higher side for doing exports to
some of the land locked countries.
3% INTEREST SUBVENTION TO READYMADE
GARMENT SECTOR
We
are happy to note that the Hon’ble Minister has recently said that 3% Interest
Subvention on Rupee Packing Credit would be announced soon.
Madam,
we wish to point out that as the cost of credit is on higher side compared to
our competing countries, the Readymade Garment sector is struggling to maintain
their competitiveness and loosing the market share. In view of this, we request to include the
Readymade
Garment sector under 3% Interest Subvention Scheme, which provide employment
next to Agriculture, that too women workers more than 70% and also using 99% of
domestic content while exporting the garments. In that sense, Readymade Garment
sector is fulfilling the Hon’ble Prime Minister vision of “Make in India”
initiative and in fact this sector always stand in front in this concept. It is
to be noted that the
Readymade
Garment sector straightaway fulfill all the requirements of FTP for incentive consideration
and hope it would be announced soon.
A Separate Chapter for Export Sector...!
In view of protecting the export sector from
increasing credit rates, a separate
chapter for export sector is required in RBI Monterey Policy as suggested
by Padmanabhan Committee constituted by
RBIand the export sector should be delinked with the base rate system being
followed by the banks. As the base
rate is the minimum lending rate, pre shipment and post shipment export credit
in Indian Rupee has to be given at the Base Rate itself.
Till a separate chapter for export is
announced, the Bank credit rate given to exporters may be fixed at 7.0% as the interest rates prevailing
in our competing Countries are lower than our banks rates. We request the
Hon’ble Minister to help for the same.
FTP 2015 -20 - STATUS HOLDER CERTIFICATE
We wish to note that as per Foreign Trade Policy 2015
-20, the exports for reckoning of Status Certificate should include export
during current and previous 3 financial years instead of current and previous 2
financial year. Most of the companies are filing Status Applications only after the audited balance sheet is made available to them and
thus claim the status certificate on 3 years basis.
Such
companies will now have to claim the same on 2 year basis. This will increase
the threshold limit for them by 50%. Only those exports where the let
export order is after 1.4.2013, for which payment has been realized upto the
date of filing of application in 2015 will be counted. Many of the exports
effected in last few months of the current year may not have been realized and
thus in any case have been excluded.
We request the Hon’ble Union Minister of Commerce and
Industry to kindly address the issues which will naturally help the exporters
to enhance the competitiveness and thereby, increase the exports growth also.
Thanking you
Yours faithfully
A.Sakthivel
For more details
Federation of Indian Export Organisations(set up by Ministry of Commerce,Govt. of India)
Southern Region
Spencer Plaza, 7th Floor,769, Anna Salai
Chennai- 600 002
Tele :+91 44 2849 7744, 91 44 2849 7755, 91 44 2849 7766
Fax: +91 44 28496666
Wen: http://www.fieo.org
Export Helpline TOLL FREE NUMBER - 1800-121-9000
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