Government boosts linen exports with increased duty drawback rates
In a move to bolster the linen industry and enhance exports, the Indian government has announced an increase in duty drawback rates for linen products made from cotton and blended fibers. The Ministry of Finance's Department of Revenue issued a notification on April 30th, 2024, detailing the revisions.
The notification signifies a significant boost for manufacturers of cotton linen products like bedsheets, tablecloths, towels, and kitchen linens. These products, classified under HSN code 630201, will now benefit from a duty drawback rate increase from 2.6 to 3 per cent. This translates to a higher rebate on customs and excise duties paid on imported materials used in their production. Furthermore, the upper limit for the duty drawback amount has been raised from Rs 40.5 per kg to Rs 68.9 per kg, providing greater financial support to exporters.
The government has also extended its support to blended fiber linen products (cotton and man-made fibers), categorized under HSN code 630202. These products will now enjoy a duty drawback rate increase from 2.4 to 2.6 per cent. While the upper cap for the duty drawback remains unchanged for now, this revision indicates the government's recognition of this growing segment within the linen industry.
Industry experts anticipate these changes to be a positive development for Indian linen exporters. The increased duty drawback rates will make linen products more price-competitive in the global market, potentially leading to a rise in export volumes. This, in turn, could stimulate growth in the domestic linen industry, creating more jobs and boosting the overall economy.
The move to increase duty drawback rates aligns with the government's broader strategy to promote Indian textiles and apparel exports. Linen, known for its durability, breathability, and natural elegance, is a niche market with strong potential for growth. By providing targeted support, the government aims to make India a leading global hub for high-quality linen products.
