The Textiles Ministry today said it will soon ask the Commerce Ministry to restore the export incentives under the Focus Market Scheme (FMS) given to cotton and cotton yarn exporters.
The Directorate General of Foreign Trade (DGFT) was of the view that these products are on one hand availing export incentives under FMS, while on the other hand there are curbs on their exports.
“We will be writing to the Commerce Ministry in this regard. It withdrew FMS which was given to cotton and cotton yarn exporters and it was based on the belief that we have already got surplus production in this country. So, they must have thought that it (sops) is not necessary,” Textiles Minister Kavuru Sambasiva Rao today said.
He was talking to reporters after chairing a Conference of State Ministers of Textiles here.
He, however said, the Current Account Deficit (CAD) is a major issue. To address this, exports have to be increased in order to bring in more foreign exchange in the country. Therefore, the Commerce Ministry should encourage textiles exports.
The objective of the FMS was to offset the high freight cost and other disabilities to select international markets with a view to enhancing export competitiveness.
It allowed a duty credit of 2.5 per cent of free-on-board value of exports to countries that are identified as focus markets by the government. The duty credit may be used for import of inputs or goods, including capital goods.
The government has imposed quantitative restrictions on the exports of cotton and cotton yarn.
Exporters can apply for registration certificate (RC) for a maximum quantity of 30,000 bales or actual quantity exported in the previous cotton season, whichever is less. One bale contains 170 kg of cotton.
In regard to the Technology Upgradation Fund Scheme (TUFS), Rao said: “TUFS has been notified. Earlier, in August this year, the Cabinet Committee on Economic Affairs gave its approval for continuing the TUFS during the 12th Plan period with a major focus on powerlooms in accordance with the Budget announcement for the 2013-14 fiscal.”