The Hindu Business Line : `MFA phase-out will benefit Tirupur knitwear exporters'

TIRUPUR as a knitwear exporting cluster stands to gain additional share in global garment market as the last tranche of the MFA phase-out by end-2004 will free the remaining 49 per cent quotas, all containing the most critical textile items in key importing countries: the US, EU and Canada.

The freeing of quota, which would also result in additional world trade of another $100 billion, will offer immense scope for Tirupur's knitted garment exports as the cluster with its customised production practices to meet short deliveries, low-volume but multiple-design and high value garmenting continued to enjoy the competitive edge, the Tirupur Exporters Association (TEA) has said.

Speaking at the 13th annual general meeting of the TEA, its President, Mr A. Sakthivel, maintained that notwithstanding the `unique' advantage of catering to the niche EU markets as well as the mass US markets, the knitwear producers of the region have to be put up with structural deficiencies that came in the way of realising the full export potential. During 2002-03, knitwear exporters had to bear the brunt of truck operators' agitation and the US quota embargo on the crucial 338 categories of exports. The rupee-dollar disparity too added its share of woes for the garment shippers.

The introduction of Cenvat duty on the knitwear sector did subject the small and medium enterprises to the unwanted bureaucratic tangles.

But keeping with the Government's intent and determination to implement the `Cenvat' tax system, Tirupur exporters through TEA managed to convince the Government the need to simplify the Cenvat procedures.

The Government too acceded to their suggestions especially in areas like Cenvat registration through established industrial associations and shifting of Tirupur from the purview of Salem Excise commissionerate to Coimbatore.

The TEA President pointed out that disparities in taxation, high turnaround time in the manufacturing sector and lack of infrastructure in handling shipments at ports may have a bearing on the knitwear exports. Limited draught at Chennai and Tuticorin ports forced Tirupur shippers to move large consignment through Sri Lanka's hub port where Indian exports are given low priority.

Though recently the plying of mother vessels between Tuticorin and US/Europe was made possible, the association pleaded for increased frequency of these vessels.

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