Extension of RoSCTL to boost textile exports
Prime Minister Narendra Modi recently gave his approval to extend the Rebate of State and Central Taxes and Levies (RoSCTL) on exports of apparel, garments and made-ups till March 31, 2024. The rebate rate will remain the same as notified by the Textiles Ministry of India in March 2019. Fibre2Fashion spoke to a cross-section of industry players.
The long term of the scheme will be beneficial for the exporters to work out the costing accordingly, as exporters usually take orders 4 to 6 months in advance.
The industry had been struggling with stagnation in the exports of garments and made-ups for more than four years, and as the Covid ebbs it has started getting good market opportunities. The industry could not make commitments in the absence of RoSCTL benefit and was under stress for the last couple of months. The announcement has now given us enough confidence and a level playing field to increase exports and create new jobs for several lakhs of people.
Clarity on the scheme has brought in much needed relief to the Indian exporters of apparels and made-ups, particularly apparel exporters, who are already struggling to maintain their share in an intensely competitive global apparel market. This step would provide stability and enable them to effectively price their products without worrying about retrospective changes.
It's a timely and right intervention from the government to bring more thrust to exports of apparel and made-ups. This clarity will help textile exporters to plan their growth opportunities in a better way. All international brands, particularly from the US, are looking at India as a credible alternative destination for sourcing. Textile entrepreneurs should use the opportunity with the support of government to build scale and competitiveness. We welcome the announcement.
This is going to help all apparel and made-up vendors. They now get a consistent policy till 2024 wherein all taxes paid prior to exports are refunded to them. It is a different scheme from RoDTEP. You will see a lot of investment in this sector now.
A welcome decision. We have been fighting for this for the last 6 months. The two things we appreciate is that the old RoSCTL rates have been continued and the policy has been extended for 5 years which gives us some stability in our pricing to customers. Secondly, this announcement is also an official recognition of two things - first, the importance of this industry as an employment generator, particularly for the most vulnerable sections of the society. And this is a recognition that in order to be internationally competitive, exports must be zero rated. If a country has embedded taxes in its export products, that will reduce its competitiveness in the international market, which is particularly important for industries like ours which faces cut-throat competition at the international level. We all know this is a hugely labour-intensive industry, and it is not a level playing field globally.
The Indian textile sector has been increasing its competitive standing on the global stage given the various internal issues that China is facing on the environment and other factors. The gradual realignment of the global supply chain and reduced dependency on China has had a cascading effect on the Indian textile industry. In addition, the various schemes such as PLI and Mega Textile Parks have given impetus to India's finished garments and apparel sector. So, given all these factors, the government's current policy decision to extend tax rebates takes away a big concern for the finished garments sector. This reinstatement will enable the domestic industry to be more competitive on a global scale and we as Asia's largest denim fabric manufacturer will also indirectly benefit from this measure on the denim side more specifically. This will also ensure a further uptick movement in exports.
Published on: 16/07/2021
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.