Cotton textile exporters have welcomed the government’s decision to raise the Merchandise Exports from India Scheme (MEIS) by 2 per cent on labour intensive sectors. Ujwal Lahoti, Chairman of The Cotton Textiles Export Promotion Council (Texprocil) says the midterm review of foreign trade is progressive, growth oriented. The government has recognised the urgent need to address the challenges being faced by the exporters on account of the roll out of the goods and services tax (GST) regime by focusing on reducing procedural burden.

Earlier the MEIS rates for garments and made ups were increased from 2 per cent to 4 per cent. With current increase, the MEIS has gone upto 6 per cent. However, cotton textile exporters urged the government to include cotton yarn under MEIS and extend 3 per cent Interest Equalisation Scheme to merchant exporters. Exporters have also urged the government to cover fabrics under rebate of state levies (RoSL) and increase MEIS rates for fabrics to allow domestic procurements against Export Promotion Capital Goods (EPCG) Authorizations and Advance Authorisations without payment of GST for export production.

Meanwhile, the policy has disappointed manmade fibre segment. Srinarain Aggarwal, Chairman of The Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) stated although the mid-term review had addressed a host of the issues from GST to ‘Ease of Trading’ across borders, it has grossly overlooked the manmade fibre segment of the country that has been reeling under GST with asymmetrical input taxes and inverted duty structure, besides facing fierce competition in overseas markets.

SRTEPC had sent various representations to the Ministry of Textiles and Ministry of Commerce and Industry. Recently, it had sent a list of 167 MMF items in these categories to the Ministry of Commerce and Industry requesting to increase the MEIS rates.