Aim $100 bn textile export, $250 bn domestic production: Piyush Goyal
“I have settled for 44 billion this year. Domestic production has to grow to $250 billion. It is very much doable,” he said at a meeting with textile exporters.
Goyal also said that the government can’t force freight rates as it’s a double-edged sword, and should be done cautiously and carefully while assuring the industry to take up the issue of container shortages and high freights with the shipping lines.
The Cabinet Secretary recently took stock of container shortages in the country that is hurting exports.
“It’s a private sector led service and beyond a point, I don’t know how much we will be able to interfere in that since it’s a global problem,” Goyal said.
Exporters have raised the issue of a global shortage of containers and a resultant jump in freight rates. Container prices have increased 300-500%.
“If you look at the export numbers it is not as if the exports have stopped or that badly affected. If it’s a problem for you then it’s a problem for other countries also. In a way, things are levelised,” he said.
However, the minister ruled out any move to regulate freight rates by the government.
“The government can’t be mandating or forcing these rates because if we force the rate today downwards- you all have enjoyed low rates in the last ten years- tomorrow if they come to us that the rates are down and now you increase the rate up to make our business also profitable. It’s a double edged sword. You must be prepared mentally for that before you all start asking for regulation of freight rates. That’s something that should be done cautiously and carefully,” he said.
Goyal is likely to meet stakeholders on the issue next week. He said the government will discuss with the shipping lines to see what can be done to get adequate containers into the country and rationalise the rates which have actually become “really exorbitant”. He said he would also resolve payment related issues wherein for full container loads, exporters are allowed to pay in dollars but not in part containers.
Goyal said the finance ministry is likely to set up a review committee to examine inputs that are given by the industry for correction of rates under the Remission of Duties and Taxes on Exported Products (RoDTEP) incentive scheme to make required changes in case some anomalies have crept in.
“We have requested the finance ministry to set up a review committee or an anomaly committee to go into any inputs that we may like to put up for correcting any rates, where there may be a mistake,” he said, adding that India did not want to export any taxes.
The scheme provides for an inter-ministerial RoDTEP Policy Committee to take up any residual issues related to it.
“If any of you feels that your product has not rightly received what is due to them, it will be examined by the independent committee. It is not for the government or ministry to finalise or settle across the table. It is a rational scientific process,” Goyal said.
Last month, the government notified the rates under the RoDTEP scheme aimed to remit all input duties paid by exporters, including embedded taxes. The scheme covers about 8,555 product lines and the remission rates fall between 0.01-4.3% of the export value of a specific item and cover and many exporters have complained that the rates are lower than the taxes they pay.
“When the scheme is reviewed next year, the government will be able to take a look at any anomaly that may have come into the system,” he said.
The minister clarified that RoDTEP is not an incentive scheme but only a remission of unremitted taxes.
On the issue of pending dues to the exporters, Goyal said the textile ministry is working closely with the finance ministry and most of them may be paid this year while the rest may be cleared next year or at most in two years.
“Effort is to frontload as much to make available for working capital,” he said, adding that he has already started that dialogue with states to pay the dues on time.
Stressing that exports have to stand on their own legs, he said constant demand for subsidies and incentives is “not going to be good for industry”.
To open new market opportunities and provide new avenues, Goyal said that he was personally interacting with different nations to expedite free trade agreements and preferential trade agreements, with partners such as the EU, the UK and Australia.
“It shouldn’t be that my sector needs protection and the other doesn’t. When we were making vaccines, we realised that for a large number of items, we were totally dependent on imports. Fortunately we have good relations built over several years and painstaking efforts by Prime Minister Modi and Vaccine Maitri programmes. Some people criticised that but it is thanks to this that the rest of the world supported the ramp up of our vaccine manufacturing capacity,” he said.
Goyal said that during FTA talks, industry can’t seek access for itself but doesn’t allow market access.
“Like we did in RCEP (Regional Comprehensive Economic Partnership), we demanded and didn’t get it. So, we walked out. India will have to look at opening up more if we want other countries to open up to us,” he said.
The minister explained that Bangladesh is a least developed country LDC and hence, it has access to the entire world to zero duty.
“You give the example of Vietnam, but Vietnam has opened up almost 100% to imports,” he told industry.
The textiles ministry has proposed to develop seven Mega Integrated Textile Region and Apparel (MITRA) parks as part of a plan to double the industry size to $300 billion by 2025-26.
“We will be looking at a challenge route and would be giving commitments for land, labour laws, infra, power and other utilities at attractive prices,” Goyal said.
He said his ministry has started a dialogue with states and sought assurance for ten years’ power at fixed cost or a formula based cost or land at very attractive rates for the textile industry to set up a park.
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