The COVID-19 virus is spreading rapidly not only in China but also to other parts of the world including India. While the Government of India in collaboration with the state governments has taken remedial steps to contain the spread of the virus across the country, its impact on the economic activity including the export and import business is a matter of deep concern.
In a statement, Dr. K.V. Srinivasan, Chairman, Texprocil stated that the spread of corona virus, especially in the United States, leading markets of Europe like Spain, Portugal, Italy and even the United Kingdom has led to cancellation/deferment of orders on a very large scale. The buyers and major retail shops importing home textiles from India have put development of any further business on hold. This has caused considerable anxiety amongst the exporters as production has been cut back and the fears of layoffs loom large, if the situation does not improve in the next 15-20 days.
As regards supplies of material like cotton yarns and fabrics are concerned, almost 41% of exports are directed to the 10 most COVID-19 affected countries. These exports have virtually come to a standstill. As per the current estimates, exports will decline by over 40% in the coming months, if the situation does not improve.
In order to overcome the present situation, Dr. K. V. Srinivasan stated that there is a need for urgent policy interventions/support in order to provide fiscal relief and ensure credit flow. Some of the measures required immediately to support the ailing textile industry, which has significantly large dependence on the international market include:
- Extend the ROSCTL Scheme to cotton yarn and fabrics so that India’s competitiveness is enhanced.
- Extend interest subvention of 3% beyond 31st March 2020 and also cover cotton yarn within that to ease financial burden.
- Include items like quilts, fashion bedding covered under 9404 and cotton shopping bags covered under 420222 in the ROSCTL Scheme. These items are being currently excluded as they do not fall under Made-ups HS Chapter 63.
- Extend the MEIS Scheme for all textile products beyond 31st March 2020.
- Expedite GST refunds, resolve glitches in ROSCTL payments and release claims under erstwhile ROSL Scheme.
He added that there is a good demand for these items in USA and with supplies from China being disrupted India has an excellent opportunity to grow the business. Dr. K. V. Srinivasan felt that some of these measures, if, implemented quickly, would help the exporters to maintain the momentum of exports.