India's Commerce Minister Calls On The Government To Provide Support For Exporters.

The Ministry of Commerce of India has taken the initiative to take up the obligation to solve the difficulties of the textile industry. The central government of the Ministry of Commerce has made the textile industry obtain low interest credit.

The Minister of industry and Commerce Mr Kamal Nath has sent a letter to prime minister Manmohan Singh, urging him to understand the situation and ensure that the textile industry will continue to provide 4% interest subsidy, because the competition pressure of the neighboring countries has already put India's textile industry in a difficult position.

In order to overcome the pressure caused by the rupee's appreciation of the dollar, India has provided some remedial measures to exporters, but all these arrangements will be revoked in September 30th.

India's minister of Commerce and industry, Mr DK Nair, said that 4% of interest subsidies would have been in March 31, 2009, but in August 1, 2008 the central bank announced that subsidies would be abolished in October 1st.

Textile exporters have already taken into account the subsidy factor when signing the contract, and now they will not be able to perform.

He said that at present, the rupee has depreciated, and the cost of raw materials and production has continued to grow. Textile manufacturers need 4-5 months' time, plus two months' advance notice time, to cope with environmental changes.

From January to June this year, the growth rate of US exports to the normal 15-20% increased by only 1.79%.

In fact, total textile exports this year were lower than US $20 billion 500 million last year.

But the most troubling problem for the textile industry is that the government is planning to completely eliminate preferential policies for domestic exporters.

The Chinese government and the government of Pakistan are improving their textile industry.

The value-added tax rebate of Chinese chemical fiber and cotton enterprises increased from 9% and 11% to 13%.

Pakistan has also increased the R & D subsidy of clothing exporters to 6%, and now the textile industry has also received research and development subsidies.

Therefore, textile enterprises in China and Pakistan will have stronger competitiveness for India enterprises. The economic slowdown, high raw material prices, shrinking corporate profits and weakening US demand have worried India enterprises.

Mr Nair stressed that the tax paid by exporters to the state governments and the central government must be returned to the exporters.