TEA For Relaxation In EPCG Scheme
The Tirupur Exporters Association (TEA) has requested the union commerce and industry minister Nirmala Sitharaman to help in making amendments in Export Promotion Capital Goods (EPCG) Scheme that the export obligation can be fulfilled by the ultimate garment exporter through third party exports after relaxing the condition that the product manufactured by EPCG holder should be exported.
In a press release, TEA president A. Sakthivel said under the scheme, job working units like knitting, dyeing, calendering, compacting, printing and embroidery etc., have got affected since they are not directly exporting the garments and actually they are carrying out only intermediate process.
He highlighted that due to this condition imposed in EPCG scheme, job working units are being deprived of importing machinery under EPCG scheme. Sakthivel pointed out that job working units in Tirupur cluster are the backbone for the growth of Tirupur knitwear exports. More than 80 per cent of the garment exporting units are in SME sector and do not have enough financial strength like corporate companies to install entire machinery, he said.
Sakthivel expressed concern that advantages of cluster like Tirupur would be defeated and ultimately, the job working units will have to pay higher customs duty and the requirement of cost of capital will also go up.