R K Dalmia, Chairman, Cotton Textiles Export Promotion Council (Texprocil), has said that the Interest Equalization Scheme, previously known as the Interest Rate Subvention Scheme, on pre-shipment and post-shipment of garments is likely to boost cotton textile exports from India. For exporters for five years, the Cabinet Committee on Economic Affairs approved 3 per cent subvention scheme, with a retrospective effect from April 1, 2015 and this would be reviewed after three years. At a time when total exports have been declining for the past 11 months, this has come as a great relief to the industry as cotton textiles exports in India is set to revive with the scheme. Garment manufacturers will be able compete with other countries such as Bangladesh, Pakistan, Sri Lanka, and Vietnam in the Western world, which the new scheme would allow.

Dalmia said the scheme would provide the much needed boost to exports of cotton textiles as all categories of fabrics and made-ups have been covered under it. Exporters were keenly looking forward towards the announcement of this scheme as they were facing depressed market conditions and declining exports, he added.

Cotton yarns and merchant exporters however, do not fall under the scheme. Currently, cotton yarn exports are going through difficult market conditions, especially in China and this product should be covered under the scheme to enable yarn exporters to reduce costs and remain competitive in these difficult times, pointed Dalmia.