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Adequacy of raw material in post-quota garment exports -III
M K Panthaki
Estimated production of woven fabric for subsequent years, at 5.6 per cent growth
year-over-year, available for garment manufacture, is 20,064 million sq metres
for 2003-04, 21,188 million sq metres for 2004-05, 22,374 million sq metres
for 2005-06, 24,950 million sq metres for 2006-07 and 26,347 million sq metres
for 2007-08. This leaves sufficient room after meeting the requirements of the
garment industry. The pattern of production of fabrics is now the only relevant
factor to meet individual garment - type. Powerloom will obviously continue
to be the major provider offabric. Fibre-wise too, the percentage of synthetic
needs to increase to cater to the demand for winter garments which India needs
to concentrate upon to ensure an all-year presence in international garments.
Fabric imports
Special type of fabrics like linen, polar fleece, etc will need to be imported.
Again, in synthetic fabrics, we need to guard against sharp rise in price due
to imbalance in supply and demand which is not unlikely in the future competitive
world. The only way to keep a check on such price is to make our import policy
flexible enough to ensure price stability. For this purpose, the Exim policy
should permit free import of fabrics (whether manufactured indigenously or otherwise)
for export production, with sufficient checks and balances. Thus, all garment
manufacturers exporting at least 40 per cent of their production should be allowed
to import free of all duties and taxes, fabrics required by them against export
contracts. Such export contracts should be registered with regional offices
of DGFT and given a specific number. Customs shall allow duty-free fabric imports
only against such registered export contracts, without any question of adequacy
or volume of such import. The regional offices of DGFT should monitor the fulfillment
of export contracts by the exporters lodging with them copies of their export
documents and confirmation from banks on the realisation of export proceeds.
All shipping bills should bear the DGFT registration number as well as that
of the Import Licence. The regional offices of DGFT should debit the import
licences with the volume of fabric utilisation (including wastages on the reverse
of the licences until fully utilised or within 10 per cent of the volume imported.
It may be often necessary to undertake bulk imports of fabrics, to save on foreign
exchange, against expected repeat orders. Such repeat contracts should also
be registered with the licence number of the imported fabric intended to be
used against such contracts.
If any balance fabric is left in the import licence, over and above 10 per cent
of the volume of fabric imported, the exporter concerned should be called upon
to pay full import duty on such balance.
Any misuse of such import licences should have a deterrent punishment with fines,
imprisonment and black listing of the exporter.
Concluded
(The author is director, CMAI)
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