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Duty-free import of embellishments -- Garment exporters in tight spot

Our Bureau

COIMBATORE, July 10

GARMENT exporters are in a tight spot as the Central Government has withdrawn the scheme of duty-free import of trimmings and embellishments.

The apparel export promotion council (AEPC), which has been providing the necessary import certification (IC) for the garment exporters to facilitate the 3 per cent duty-free import of trimmings and embellishments, has communicated to the exporters last week on discontinuing the scheme.

The council has also sounded out the exporters to surrender all the ICs issued to them by AEPC immediately. The discontinuation of the duty-free import of embellishments and trimmings scheme has been made with immediate effect, according to garment indus try sources.

Tirupur knitwear exporters are particularly sore over the sudden withdrawal of the duty-free import facility. They contend that the termination of the scheme and asking the exporters to surrender the import certification will put them in bad light before the buyers as they have booked the export orders on the condition that they would use imported trimmings and embellishments for the garments to be exported.

The exporters also argue that the sudden withdrawal of the facility would also upset their cost calculation in the garment shipments finalised.

They wanted the Government to allow the exporters already issued with the import certification to avail of the facility considering these aspects.

The Government had originally provided with the facility of importing duty-free import of trimmings and embellishments such as fasteners, poly-wadding materials, inlay cards, shoulder pads, buckles, hooks and collar patties up to two per cent of the f.o. b. value of garments they export every year. To provide further thrust to exports, the Government had hardly a year ago enhanced this to three per cent of the f.o.b. value of exports.

The latest communication from AEPC has unnerved the Tirupur exporters who are just recouping from the after-effects of the Government's recent handling of the duty drawback rate rationalisation and the subsequent partial restoration of drawback revision.