India’s new foreign trade policy could affect textile exports to Africa

India’s new Foreign Trade Policy 2015 to 2020 has removed all benefits on exports to African countries, which has had a serious impact on exports of value-added products such as cotton dyed and printed fabrics and “made-ups” to African countries, said Shri R.K.Dalmia, chairman of The Cotton Textiles Export Promotion Council in India (Texprocil).

According to him, the newly introduced Merchandise Exports from India Scheme (MEIS) allows for duty credits of up to 5% on exports of certain products to specified countries.

“However, the scheme does not include exports of value-added and labour intensive products such as cotton dyed and printed fabrics as well as made-ups  to Mauritania, Mali, Dar es Salaam, Burkina Faso, Guinea Bissaou, Niger, Benin, Angola, Senegal, Togo, Ghana, Kenya and Tanzania,  which is a major blow to the exporters to the African region, said Dalmia. 

The preceding Foreign Trade Policy (2009 to 2014) allowed for duty credits of 4- 7% on exports of cotton fabrics and value-added products to the same countries. “The overnight withdrawal of these benefits has put the exporters under huge pressure,” Dalmia pointed out.

He added that India’s current share of textile exports to the African region was less than 5% but that there was “huge potential” to increase this share if adequate export benefits were extended.