Chintan Thaker, chairman, Assocham Gujarat state council, said, “Scrips are trading at about 20% discount in the market. Since apparel makers are not importers, they cannot directly use the scrips and are selling them to importers. However, with the discount, exporters don’t get the full benefit of the incentives. Even though the scheme was introduced to aid exporters, they are unable to avail of its benefits.”
Industry players expressed concerned at apparel exporters losing competitiveness in the international market. As the demand for such scrips is low, exporters are unable to find buyers at a proper price.
The textile industry wants the government to restart cash reimbursement instead of tradeable scrips, as these scrips are trading at 20% discount. These scrips are sold by exporters to importers, who in turn can pay their import duty with the scrips as an alternative to cash import duty payments. This is resulting in substantial cash transfer from exporters to importers.
“Local players will certainly lose export competitiveness because they are at a net loss of duty benefits. This defeats the purpose and intent of the scheme promoting the government’s Make in India initiative and instead encourages import dependence,” said Vijay Jindal, president, GEMA.