The special advance authorization scheme announced by the centre will help garment exporters to compete better with counties like Bangladesh and Vietnam.

The scheme allows duty-free import of specialty man-made fabric used as inputs for exports, especially high-end garments, thereby reducing the gap between Indian exporters and their competitors.

Currently, apparel exporters from India pay around five per cent import duty while exporting to the EU, compared to zero duty for exporters from Bangladesh.

According to the Apparel Export Promotion Council (AEPC), the new scheme will add up to an additional duty drawback reimbursement of 3.2 per cent to 4.7 per cent, which will help immensely in increasing competitive edge of Indian exporters.

“India has been losing to competition from smaller nations like Bangladesh and Vietnam because of higher labour cost, absence of cluster manufacturing and inability to attract women workforce to reduce labour costs,” Ashok G Rajani, chairman of AEPC said.

– Indian Apparel, Apparel Talk