The Hindu Business Line : `DEPB rate cut will hit textile exporters'

THE Cotton Textile Export Promotion Council (Texprocil) has expressed dismay at what it calls `sharp' reduction in the duty entitlement pass book (DEPB) rate for the textile exporters. The DEPB rate reduction to the extent of 45 per cent being done at a mid-year will severely dislocate the execution of the export orders already negotiated by the textile exporters, said Mr B.K. Patodia, Chairman of the Texprocil.

Since the textile exporters would have already taken the current DEPB rates into account while finalising the export contract, the rate cut at a time when the deadline for shipment for the Christmas season was to be met will jeopardise the exports.

Worldwide, it is well known that importers would be averse to renegotiate contracts that were already signed. Mr Patodia in a statement said that the steep rate reduction for textiles was unjustified when there has been no change in the Customs duty applicable for the cotton textiles and DEPB scheme was meant to neutralise various types of duties suffered on the inputs consumed. He felt that the reduction in the DEPB rates would nullify the competitive edge the textile exporters derived from the Excise duty reforms and called upon the Government to reconsider the rate cut.

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