The textile industry is gearing up to target African markets more aggressively with the government making export of cotton fabrics and made-ups eligible for incentives under the Merchandise Exports from India Scheme.

Focus on Africa The Director General of Foreign Trade on Thursday included exports of cotton fabrics — both woven and knitted — and made-ups to leading markets including African countries in the scheme.

Introduced in the Foreign Trade Policy 2015-20, the MEIS scheme provides incentives under which rewards are payable by way of MEIS duty credit scrip ranging from 2 to 5 per cent of export value (free-on-board). The scrip can be transferred or used to pay many duties, including the basic customs duty.

The incentive comes at a time when cotton textile exports are falling due to weak demand in the global markets. This apart, the competing countries have performed much better as their currencies have depreciated against the dollar more than the rupee has.

In September, exports of cotton yarn and made-ups were down 4 per cent at $911 million ($945 million). In the first six months of this fiscal year, exports were down 2 per cent at $5.16 billion ($5.28 billion).

RK Dalmia, Chairman, Cotton Textiles Export Promotion Council (Texprocil), said the sops would be a major boost for labour-intensive products such as cotton dyed, printed fabrics and made-ups.

With the country-specific incentive, he said India can focus more on African countries and cotton fabric export would increase 10-15 per cent this year. Inclusion of various categories of knitted fabrics under the MEIS will also encourage exports of knitted fabrics and lycra, he added.

If these measures are followed up with the much-awaited interest rate subvention scheme and increase in drawback rates, exporters will be able to cope with the slowdown in demand, he said.

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