Stilts for Sagging Fortune?
Governments usually go by the diction, ‘better late than never.’ The recent instance is when the Finance Minister Nirmala Sitharaman announced six steps to boost exports including the new Reimbursement of Taxes and Duties for Export Promotion (RoDTEP) scheme on export duties, Dubai-like mega annual shopping festival from next year, and a new automatic refund system for exporters from next month.Will these measures help make Indian exports competitive? The Government is confident that these will especially benefit MSME exporters with the new scheme for reimbursing taxes, reduced insurance cost and ease of doing business. The total exports of India have crossed $537 billion in 2018-19, but the target for the next 5 years is
$1 trillion. To achieve this we need to increase domestic production and improve the competitiveness. The textile industry has so far demonstrated its incapability to lend a helping hand to achieve this new ambition. Look at last year’s textile export figures: India’s apparel exports touched $17 billion against China’s $145 billion, Bangladesh’s $36 billion and Vietnam’s $33 billion. The fact that India is losing out to small players is hurting the country most.
Besides, there are indications that negotiations for the contentious Regional Comprehensive Economic Partnership
(RCEP) trade deal will soon be completed. The RCEP is a proposed trade pact between the 10 countries of the Association of Southeast Asian Nations and their six FTA partners, including Australia, China, India, Japan, Korea, and New Zealand. It accounts for 25 per cent of global gross domestic product, 30 per cent of global trade, 26 per cent of foreign direct investment flows, and
45 per cent of the world’s population. India’s trade agreements have not so far worked out smoothly. It has no mega trade pacts with any country. China, which is a part of RCEP, may become a big problem with its insatiable appetite to export, causing much harm to the domestic industries in India. Heated debates are on, and no solutions are in sight.
Will the new set of sops help unshackle the Indian textile industry and propel it towards a new path of progress? Time only can tell.