Spinning concerns

Mumbai, Jan. 3: Cotton textile exporters have voiced concern over the recent move by the Centre to reduce the duty entitlement passbook (DEPB) rates. Exporters feel that it would adversely affect the cost and prices they have negotiated with importers.

According to exporters, with prices likely to fall on account of the removal of quotas, reduction in DEPB rates at this juncture would further complicate the situation.

The government had announced the reduction of DEPB rates last week. Industry analysts said the new DEPB rates come at a time when they are facing a huge price pressure from overseas buyers because of an absence of the quota cost.

The DEPB rates for cotton textile products that included yarn, fabrics and made- ups were brought down by 15 per cent. Simultaneously, the rates for man-made textile products were stepped up.

B. K. Patodia, chairman of the Cotton Textiles Export Promotion Council (Texprocil), was disappointed with the ?unfair and unjustified reduction in the rates for the cotton textile sector?.

He said, ?Robbing Peter to pay Paul was not the best way of enunciating a policy in a complex and vital sector like textiles at such a critical juncture.?

The DEPB rates, which are intended to neutralise the incidence of basic customs duty on exports of cotton textile export products, should not have been reduced, as there was no corresponding reduction in the basic customs duty for the items, Texprocil added.

Moreover, issues like quality, contamination and non-availability of extra long staple cotton have remained unresolved.