The Finance Ministry has effected a general reduction in duty drawback rates with immediate effect.
This will adversely impact export sectors such as textiles and textile articles, leather and leather articles, base metals and articles of base metals, besides bicycles and bicycle parts.
This rate revision has come after two years.
The rates for leather and leather articles have been brought down by 5-15 per cent. For readymade garments, other than silk , the rates have been cut by 10-15 per cent. There has been a
30 per cent reduction in the rates for hand tools. There has been a marginal reduction in the rates for man-made filaments and man-made staple fibres.
For most carpets and floor coverings, except for silk carpets, the rates have been pruned by 10 per cent. For silk carpets, there is no change. For woollen yarn and fabrics, the rates have been scaled down by 5-20 per cent. The drawback caps have also been revised downwards.
The exporting community has expressed its unhappiness at the reductions. "The reduction in drawback rates will further affect export of sectors which are showing negative or single-digit growth," Mr A. Sakthivel, President of the Federation of Indian Export Organisations (Fieo), cautioned.
Reduction of drawback for apparel, leather, metal, handicraft, carpets, low-end engineering products would also have an adverse bearing on employment generation, he warned.
Source: Exim News Service, New Delhi, 20 September 2010