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Rise in duty drawback rates to boost India's struggling textile sector

The Indian government has announced an increase in drawback rates—customs and central excise duties charged on imports that are subsequently used as inputs in items for export. The new rates, effective from October **, ****, have been lauded as a boon for the textile sector, which has been facing stiff competition from Asian rivals including Bangladesh, Vietnam, and China.

The most notable change has been in the cotton T-shirts category, where the drawback rates have been elevated from *.* per cent in **** to *.* per cent in ****. Additionally, the value per unit cap for baby garments and blended baby garments has seen a significant increase. For the former category, the value change has been ** per cent, and for the latter, it is ** per cent.