Pakistan


On the lines of incentives provided by other countries like China and India to their respective textile and garment sectors, the Pakistan government has alsoapproved a mark-up subsidy of 3 percent to the spinning sector for a period oftwo years. The period began from July 1, 2007 and ends on June 30, 2009 and theamount payable till December 2008 would be paid in March 2009 and for this yearin July. The government has already earmarked Rs.1.7 billion against the 3percent subsidy, by depositing the same with the State Bank of Pakistan and made provision for another Rs.4 billion to be paid under the R&D fund.


Earlier while addressing the seminar, Mr. Farooq said that,the State Bank of Pakistan had started accepting R&D claims, the paymentfor which may begin, early next week. He also revealed that the government hadallowed import of five year old machinery, as suggested by the industry tradebodies.


India


Government of India has announced following series of stepsthrough stimulus packages to strengthen waning textile industry


Increase in Drawback rates:


  1. On cotton knitted fabrics, from 4.5% to 5%
  2. On man-made knitted fabrics, from 8.7% to 8.9%
  3. On woollen knitted fabrics, from 5.7% to 5.8%


The Value cap has been enhanced for Cotton yarn, grey from Rs.8.00per kg to Rs12.00 per kg.


In the first stimulus package government had made provisionfor paying Rs.140 billion under the Technology Up-gradation Fund Scheme (TUFS)to the textile industry under the scheme.


All the above changes in drawback are being implemented witheffect from 1st September, 2008. Drawback will henceforth be alsoallowed on boots/ half boots/ shoes of leather cum synthetic/ textile materialsat 10.5% subject to a value cap of Rs.110 per pair.


In February-2009, Government decided to provide 5% incentivefor exports of cotton from India and allowing government agencies such asCotton Corporation of India (CCI) to provide discounts for bulk purchase ofCotton. The Government of India has announced 5% duty credit scrip for rawcotton with effect from April 1, 2008 and the benefit would be available forall cotton exports made and till 1.7.2009.


Measures like extension of interest subvention of twopercent on pre and post shipment credit till September 2009, which was to expirefrom March 2009 is announced in the Interim Union Budget


Indonesia


Indonesian textile and exports have received a double bountyin the form of duty free access for their goods to other countries. First, itwas Japan and now Australia too has supported the move to allow products from Indonesia to enter the country without paying any duty. This tariff free access period willbe applicable for a period of two years from 2009 to 2010 and is expected tohelp the export industry to reduce the impact of the downtrend in shipmentsfrom the sector in the last few months, since the unveiling of the economicturmoil. The Free Trade Agreement (FTA) with Australia and New Zealand is expected to be signed on February 27 at the high level meeting of ASEANcountries.


 

Nigeria


Nigerian textile industry is one of the biggest employment providing sectors of the country and provide employment to more than 500,000 people. This industry is now passing through tough phase due to worldwide economic downturn and this has placed many jobs at stake if measures are not undertaken.


The textile industry and various bodies representing industry have been crying for revival package since long. The Minister of State for Finance, Mr. Babalola has announced N70 billion textile industry revival fund, which is expected to be released by the government in the month of March.


China


The executive meeting of the State Council, chaired by Premier Wen Jiabao on February 4, 2009, examined and approved in principle the revitalization plan of the textile industry, exports of which are rapidly falling since the last few months.


Increase in Export Tax Rebate rate


Export tax rebate rate on textiles and garment has been increased from 14 percent to 15 percent which is the fourth increase in the last eight months and it is estimated that increase in export tax rebate will notably increase profits of struggling Chinese enterprises. Earlier the export tax rebate rate availed by textile industry averaged at 12 percent in 2008, which has now touched 15 percent. The industry feels that increase in export tax rebate rate is the most direct, covering all aspects and one of the most benefiting policies in the stimulation package.


Other measures:


In addition, the state will provide credit support to enterprises that have good fundamentals but face temporary operating and financial difficulties. The government also promised to facilitate mergers and acquisitions in the sector by granting preferential financial supports to backbone companies when they conduct M & A.


The state will provide support to medium and small textile enterprise; encourage guarantee agencies to provide credit guarantees and financing services, aiming to alleviate burdens of textile enterprises.


At the same time the central government and local governments will enlarge the acquisition volumes of cotton and raw silk from the markets to help the industry, survive through the crisis at least in 2009.


The central government will set up a special fund to advance the technologies for fiber spinning and weaving, dyeing and printing and chemical fiber production, and support commercialization of certain high-tech fibers.


USA:


U.S. Congress finally passed the stimulus budget, with a total size of about US $790 billion on the night of February 13. It contains the controversial Kissell amendment which seeks that all textiles and clothing products contracted by the Department of Homeland Security (DHS) must be produced from 100 percent American ingredients.


Some industry experts believe this step will help American textile industry very positively and will help achieve Governments' primary goal of creating jobs. The stimulus bill cleared Congress. While speaking about the Kissell Amendment, Auggie Tantillo, Executive Director, American Manufacturing Trade Action Coalition, stated that for every $100 million spent, 5000 textile industry jobs will be generated or preserved.


Mauritius


Mauritius which was known for its Tourism and textile business is facing adversities as global meltdown has unfavorably affected these two industries. To counter this negative effect Government released stimulus package of US $330 million in December 2008. According to Mr Ramakrishna Sithanen, Finance Minister of Mauritius, the US $330 million stimulus package, has helped save 1,700 jobs in various sectors, including textiles, which is one among worst hit sectors in the country.