With Houthi militants roiling Red Sea transit, India’s textile exporters have been overwhelmed by expensive delays. In response, the country’s Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) is seeking relief under the Indian government’s Rebate of State and Central Taxes and Levies (RoSCTL) scheme, as well as its Remission of Duties or Taxes on Export Products (RoDTEP) program. The trade group, which represents producers of fabric and apparel made with synthetic materials like polyester and acrylic as well as man-made fibers like viscose, also known as rayon, believes duty reductions and government rebates could help textile shippers currently struggling to get their goods on the water.
Militants began attacking cargo ships in the Red Sea in December, congesting the busy Suez Canal. Shippers including Maersk, MSC and CMA CGM have recently rerouted vessels around southern Africa’s Cape of Good Hope. These diversion have spiked ocean freight rates and shipment delays that could last for weeks.
Introduced by the country’s Ministry of Textiles in 2019, the RoSCTL scheme supports Indian textile exporters selling to international markets, incentivizing them through credits that can be used to pay customs duties, as well as rebates on state and federal taxes if their exports qualify. The program helps curb logistics costs for vendors or manufacturers of textiles and apparel made in India.
“We are requesting the government’s support to help sustain textile exports amidst the Red Sea crisis,” SRTEPC chairman Bhadresh Dodhia said in a statement. “This crisis has caused significant impacts on textile exports, including shipment delays and increased costs.” Dodhia wants the Indian government to use existing schemes to bolster businesses during the crisis. Most of their shipments pass through the Red Sea and the Suez Canal to reach their final destinations, he said.
According to Dodhia, the problem has sent India-to-Europe freight rates up more than 40 percent, crippling textile and apparel exporters. “If the crisis continues and is not contained quickly, it will not only harm exports from India but will severely disrupt the global supply chain and hurt the world economy,” he said.
SRTEPC reported that the Indian textile and apparel sector saw declines throughout 2023, though it rebounded in October with “significant growth” of over 6 percent from the same period the year prior. “While aggregate exports remain in the negative, the rate of decline has significantly decreased,” Dodhia said at the time, citing big impacts in the man-made textile and technical textile categories.
Established in 1954, SRTEPC is one of India’s major export promotion councils. It focuses on growing production and export of synthetic and man-made fabrics, which make up 17 percent of the Indian textile market. Exporting to more than 140 countries, India is the world’s sixth-largest exporter of man-made textiles.
“The global financial ecosystem and consumer sentiments are gradually improving, and we expect ex-ports to pick up in the upcoming quarters,” Dodhia said. “The commendable efforts and resilience displayed by our members in the face of export challenges are truly appreciated.”
