Indian Textiles & Clothing (T&C) sector is contributing around 8.00% to country’s overall exports. The export of T&C is stagnant at around USD 35 to 37 Bn and saw a major rise during 2021-22, due to pent up demand immediately after the second COVID wave. The Government has been effectively formulating new export promoting schemes and revising the existing ones viz., Duty Drawback, IES, RoSCTL, RoDTEP, etc., to sustain the global competitiveness of the exporters, so as to retain the existing market in addition to exploring new markets. With a view to effectively implement the principle that taxes and duties should not be exported and to enable a level playing field in the international market for Indian players, the blocked duties and levies on export products are being refunded through Rebate of State and Central Taxes and Levies (ROSCTL) Scheme by the Ministry of Textiles, Government of India with effect from 7.03.2019, replacing the Rebate of State Levies (RoSL) Scheme. The Scheme applies to export of Garment/Apparels and Made-ups. This export incentive is in addition to the Duty Drawback Scheme applicable to export. Though, originally the RoSCTL Scheme was valid till 31.03.2020, it was extended intermittently through budgetary allocations and is currently valid till 31.03.2024.
When the Interim Union Budget was presented on 1st February 2024, the industry was eagerly awaiting the continuation of the Scheme beyond March 2024. Through the interim Union Budget for the fiscal 2024-25, it has been announced that the Union Cabinet chaired by the Hon’ble Prime Minister of India has approved the extension of the Scheme till 31.03.2026.
In a Press Release issued here today, Dr. S. K. Sundararaman, Chairman of The Southern India Mills’ Association (SIMA) has welcomed the visionary move of the Union Government and thanked the Hon’ble Prime Minister and the Hon’ble Union Textile Minister for extending the scheme. He also expressed that the continuation of RoSCTL scheme would help in sustaining the competitiveness of the Indian textile exporters in the global arena. The extension of the operation of the RoSCTL scheme would enable the exporters to finalize long-term export contracts by factoring in the incentive in the costing of export products, thereby establishing strong business connections with the foreign buyers.
Dr. Sundararaman has appreciably acknowledged that the move of the government to conclude the FTAs with the major exporting countries in the background of the extended export benefit, would go a long way in supporting the struggling textile exporters, particularly in today’s scenario where the order enquiry is stagnated and foreign buyer order confirmations are declining, as a result of recession prevailing in the EU and other parts of the developed economies.
SIMA Chairman has stated that the scheme extends benefits even for the exporters, who have been importing fabric, the major raw material for the manufacture of apparel/made-ups, through Advance Authorization Scheme. He added that under the RoSL scheme the refund was to the extent of 1.70% and 1.16% for cotton and MMF T-Shirt and the same were enhanced to 4.9% with a cap of Rs. 13.8/kg and 3.8% with a cap of Rs. 10.1/kg respectively under RoSCTL scheme and similarly the scheme was extending 2.20% and 1.40% for cotton bedlinen / table linen / kitchen linen and MMF bedlinen respectively which were enhanced to 5.00% with a value cap of Rs.50/kg and 3.80% with a value cap of Rs.49.20/kg. He hoped that this measure would enable the Indian textile industry to achieve the export target fixed by the government to the tune of USD 100 Billion by 2030.
SIMA Chairman affirmed that the extension of the export supportive scheme was a conscious visionary move to draw substantial investment and consequently generate additional employment.