Made to Measure

PRE-BUDGET PROPOSALS FOR THE YEAR 2010-2011

India’s apparel exports has been declining for the last two consecutive year :

|Year |Export Targets |Export Performance |% Gap in performance |

| |(in USD MN) |(in USD) | |

|2005-06 |6,450 |8,627 |33.75 |

|2006-07 |9,500 |8,895 |-6.37 |

|2007-08 |12,065 |9,693 |-19.66 |

|2008-09 |11,625 |10,951 |-5.80 |

|2009-10 |N.A |10,719 |- |

|2010-11 |12,000 |10,392 |-14.8 |

| | |(Projected) | |

The major reasons for this downfall has been :

❑ Cotton prices up by 77% in the last 12 months.

❑ Cotton yarn prices touched all time high of over Rs 225/kg(40s) – Increase by 58-80% in the last 16 months.

❑ Fabric price shot up by 38-90%

❑ Withdrawal of certain benefits by Govt. like:

Reduction in Duty Drawback from 8.8% to 7.5%

Withdrawal of 2% Focus market scheme to USA beyond 01.10.10 to 31.03.2011

With a view to enhance the export-competitiveness of the Indian textile and garment industry, mitigate the impact of above constraints and current economic scenario the following...