Assgn on Legal Enviroment

8/3/2019 Assgn on Legal Enviroment

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Legal Environment

By:Manik AroraMFM-3NIFT PATNA


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Item covered under textiles/garments

Readymade Garments

Cotton Textiles Man-made Textiles

Wool & Woolen Textiles Silk Textile

Add handicraft, Coir & Coir Manufacturers


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Men & Boy wear:

1. Shirts(Classical/casual)2. Trousers/jeans3. Shorts/Bermuda4.Coats/Suits

5.Nightwears6.Undergarments7.Others.

Ladies & Girls(women)

1. Salwar Suits2. Frocks &Middies3. Nightwear.4. Skirts5. Trousers/jeans

6. Blouses7. Party wear.8.Kurta, pajama,churidar.9.Undergarments-Sameej, panties,

bra.10.Petticoats.11 Langha,Ghagra &chunni suits12.Long frocks

13.Other garments


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Babies

1. Baby suits2. Frocks

3. Rompers4. Shirts5. Bibs6. Knickers7. Jhabla8. Nepis

9. OtherGarmen

Articles of

knittedgarmentsfor mens,ladies,Girls,&infants

1. Socks2. Sweaters3. T-Shirts4. Other

Garments

Industrial

&Institutional garments.

1. School

Uniforms2. Apron3. HandGloves4. IndustrialUniforms.

Other

clothing &Accessories

1. Caps2. Scarves.3. Belts

4. Pillowcovers/Bed sheets5. Saree falls6. Curtains7. Cushions

Covers8. Others.


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Govt. initiatives for increasing

garment export AEPC Export Promotion Activities: Over 11 overseas projects amounting to US$ 2.96

million planned for the year 2009-10. Foreign fairs (HKFW, Magic, Interselection, etc.) Delegations (US, Tunisia, Brazil, Argentina, Chile,

Panama, Columbia, etc.) Market weeks Sourcing fairs Seminars & Workshops (REACH, Fashion Forecast,

World Apparel Congress, etc.) India International Garment Fair(bi-annual

event).


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The Government has set a target of $14 billion for garment exportsin the 2011-12 fiscal as demand is on the rise in the western markets,

India International Garment Fair. The three-day exhibition is being organised by the Apparel

Export Promotion Council.

The government is focusing on initiatives for promotion ofapparel exports. Also, a number of new schemes including

government support for the common compliance code andknitwear technology mission are proposed

The Technology Upgradation Fund Scheme (TUFS) will be a maindriver of the exports growth.

The Government had restored TUFS by increasing Eleventh Plan

allocation to Rs 15,432 crore from Rs 8,000 crore. Earlier, the Government had earmarked Rs 8,000 crore for this

purpose, which was exhausted by June 2010. Subsequently, ithad asked banks to suspend new sanctions under the schemetill allocation of additional funds.


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According to the provisional DGCI&S data, textile exports duringfiscal 2005 06 stood at around US$17 billion, recording a 22% gro

wth yearon

year. Except for man

made textiles, all segments in

the textile industry, including handicraft carpets, wool and silk, have recorded a growth in exports during 200506 the first year sincethe phasing out of the quota system in the global market.

Readymade garments (RMG) is the largest export segment, accounting for a considerable 45% of total textile exports. This segment has benefited significantly with the termination of the MultiFibre Arrangement (MFA) in Jan 05. In 200506, total RMG exports grew by 29%, touching US$ 7.75 bn. In 200304 and 200405, the growth in RMG

exports was 8.5% and 4.1% respectively. The jump in 200506 exp

orts has been largely due to the elimination of quotas.


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Exports of cotton textiles which include yarn, fabric and ma

de

ups

constitute over 2/3rd of total textiles exports (excluding readymade garments). Overall, this segment accounts for 26%of total textile exports. According to the Ministry of Textiles, in 200506, total cotton textile exports Source: Ministry of Textiles, GoI Source: Ministry of Textiles, GoI XVI were worth US$ 4.5 bn, implying a growth of 27% over the exports in 200405, which were worth

US$ 3.5 bn.


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The removal of the SSI reservation for woven apparel in 2000 and knitted

apparel in 2005 were significant decisions in promoting setting up of largescale firms. Government schemes such as Apparel Parks for Exports (APE) and the Textile Centers Infrastructure Development Scheme (TCIDS) now provide incentives for

establishing manufacturing units in apparel exportzones.

The new Textile Policy of 2000 set the ball rolling forpolicy reforms in the textile sector, dealing with r

emoval of raw material price distortions, cluster approach for powerlooms, pragmatic exit of idlemills, modernization of outdated techno

logy etc.


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The Union Budget of 20052006 announced competitive progressivepolicies, whose salient features included:

A major boost to the 1999established Technology Upgradation Fund

Scheme for its longevity through a Rs 4.35 billion allocation with 10%capital subsidies for the textile processing sector

Initiation of cluster development for handloom sectorAvailability of health insurance package to 0.2 million weavers from

0.02 million initially

Reduction in customs duty from 20% to 15% for fibres, yarns, intermediates, fabrics and garments; from 20% to 10% on textile machinery and from 24% to 16% in excise duty for polyester oriented yarn/polyester yarn

Reduction in corporate tax rate from 35% to 30% with 10% surchargeReduction in depreciation rate on plant and machinery from 25% to

15%

Inclusion of polyster texturizers under the optimal CENVAT rate o


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Government Initiatives In the recent period, the trade policy in India reflects the strategic

importance of Indias comparative advantage of trade in services. Theservices sector has been identified as a thrust sector for trade policy. TheForeign Trade Policy, 200409 has announced the setting up ofServices Export Promotion Council to map opportunities for key services inimport markets and to develop strategic market access programme.

Some of the key initiatives of the government in promoting exports ofconsultancy services are through Market Development Assistance (MDA),Market Access Initiative (MAI) scheme, proactive EXIM Policy and EXIMBank schemes.

Government also provides exemption on service tax for export of

consultancy services. However due to lack of clarity in the provisions in thepresent notification, consultancy export may be affectedIncome tax exemption under section 80 O need to be reinstated toenhance consultancy export.


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Committees for garment exports

Garment Exporters Association of Rajasthan (GEAR) wasformed in the year 1978 with help of Founder Members. Themain aim was to promote export of Garments fromRajasthan,

Since no such apex organization was in existence at that

time. Now there are around 140 members, out of which60% are life members. The members are exporting Readymade Garment all over

the world. Over the last 26 years, Association has beencontinuously in the task of promoting exports by organizingbuyers-seller meets, trade exhibitions, Garment Fairs etc.

In its constant endeavored to promote and expose IndianGarments to International markets for greater visibility andchoice of products.


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Committees Apparel Export Promotion Council

Carpet Export Promotion Council

Cotton Textile Export Promotion Council Export Promotion Council For Handicrafts

Handloom Export Promotion Council

Indian Silk Export Promotion Council

Powerloom Development & Export Promotion Council Synthetic & Rayon Textile Export Promotion Council

Wool & Woolens Export Promotion Council


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Export Inspection Council, New Delhi:

The EIC, an autonomous body, is responsible for theenforcement of quality standards and compulsorypre-shipment inspection of the various commoditiesmeant for export and notified under the Export(Quality Control & Inspection) Act, 1963. It was set upunder Section (3) of the Export (Inspection and

Quality Control) Act, 1963. It is headed by a Director.EIC is assisted in its functions by the Export InspectionAgencies(EIAs) located at Chennai, Delhi, Kochi,Kolkata and Mumbai alongwith a network of 42 sub-offices and laboratories to back up the pre-shipmentinspection and certification activities.


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Schemes

The Government has also provided industry aconducive policy environment and

initiated schemes which have facilitated thegrowth of the industry. The Technology Missionon Cotton has increased cotton production andreduced contamination levels. The TechnologyUpgradation Fund Scheme (TUFS) has facilitatedthe installation of the state-of the-art / near

state-of-the-art machinery at competitivecapital cost. The rationalization of fiscal dutieshas provided a level playing field to allsegments, resulting in the holistic growth of theindustry.


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The Scheme for Integrated Textile Parks (SITP)was launched in 2005 to neutralizeThe weakness of fragmentation in the varioussub-sectors of textiles value chain, and the non-

xxii availability of quality infrastructure. The aimwas to consolidate individual units in a cluster,and also to provide the industry with world classInfrastructure facilities on a public private

partnership (PPP) model to set up their textileunits.


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AEPC Export Promotion Activities

Over 11 overseas projects amounting

to US$ 2.96 mn. planned for the year2009-10.

Foreign fairs (HKFW, Magic, Interselection, etc.)Delegations (US, Tunisia, Brazil, Argentina, Chile, Panama,

Columbia, etc.)Market weeksSourcing fairsSeminars & Workshops (REACH, Fashion Forecast, World

Apparel Congress, etc.)India International Garment Fair(bi-annual event).


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Technology Upgradation Fund Scheme(TUFS)

Ministry of Textiles has launched a Technology UpgradationFund Scheme(TUFS) for Textile and Jute Industries, w.e.f. 1.4.1999 for a period of 5years, i.e., up to31st March 2004 which was subsequently extended upto 31.3.2007,i.e., till the end of

tenth five year plan.

US's GSP Scheme-with reference to India's textile exports


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The revised GSP Scheme was introduced by EU in 1995 valid for four years(extended upto end of 2001) with the following main features:

Product coverage: Chapters 25 to 97 of Common Customs Tariffs (CCT)Trade modulation: Categories the products as Very Sensitive (VS) (all the

Textileitems fall in the VS category); Sensitive (S); Semi Sensitive (SS) and NonSensitive(NS).


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VSs were subjected to a duty of 85% of MFN rate, AS at 70% of MFNrate, SS of 35% of MFN rate and NS full duty waiver. LDCs to get fullGSP benefit. 14 Special incentives are in place for those countrieswhich have agreed to enforce labour right, environment protection,combating drug clauses.Graduation mechanism:

(i) If the total value of exports by beneficiary country exceeded 25%of the total value of imports of that product into EU by allbeneficiaries, then such country would graduate in the item from1996.


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(ii) If the per capita GNP of any beneficiary country exceeded

US$6000, the GSP benefit would be only 50% of his entitlement duringApril 1995 to December 1995 and the entire from 1996 the entirebenefit of GSP would be withdrawn.(iii) Beneficiary country with less than $ 6000 per capita GNP whichenjoyed GSP benefit in which they have attained higher degree oftrade specialisation would get only 50% of the benefit from 1997 and

the benefit would be withdrawn totally from 1998.In respect of products falling under Chapters 50 to 60 originating fromIndia andexported to EU there was a partial waiver of 15% of CCT for thecalendar years 1995 and 1996. During 1997 the preferential marginwas reduced by 50% and from 1998 the entire GSP benefit ceased to

exist since India along with Pakistan graduated from the Scheme.The clothing items falling under Chapters 61 to 63, however,continue to get thebenefit of being subjected to 85% of MFN rate


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Thank You!!!!

Assgn on Legal Enviroment

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