TEA's Appeal

The Tirupur Exporters’ Association (TEA) has appealed to the Union Finance Minister to restore the duty drawback rates for cotton garments at 11 per cent. The Government announced recently reduction of the rates to 8.8 per cent.Association president A. Sakthivel has said in a release that the Government had not only reduced the duty drawback rates for cotton knitted garments, but had brought down the value cap too. The garment units were facing severe crisis on the price front since the cost of all inputs – yarn, power, processing and transportation charges – had shot up.

The cotton prices had increased by 25 per cent on an average. With frequent power disruption, the units were forced to use captive power generation sets and this had resulted in spiralling of the power cost for the units. With an escalation in the prices of petroleum products, the cost of dyes and chemicals, accessories and polythene bags was higher than what it was three months ago. For the production of a product, the raw materials moved to five or six places for job work. This involved huge costs for transportation.

Mr. Sakthivel said the cost of production for a Polo Shirt had gone up by 28.77 per cent higher now due to these factors. Further, the units faced a hike in interest rates. During the last seven months, exports to the United States market were showing a negative trend and exports to the European Union also showed a slight decline. This was an indication that the Indian products were not competitive in the international market.

International buyers had started looking at alternative countries such as China, Bangladesh, Vietnam, Cambodia and Pakistan to source their needs. This was a matter of concern to the Indian garment exporters.

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