The Synthetic and Rayon Textiles Export Promotion Council has asked the central government to offer higher duty drawbacks and rebates of both central and state taxes and levies for the industry amid global uncertainties including shipping disruption around the Red Sea.
“As a result of the attacks, ships are reportedly taking a 6,000 nautical miles detour around Africa which means an additional 15 days transit time that is causing [a] steep increase in freight rates and insurance premium,” said the Synthetic and Rayon Textiles Export Promotion Council’s chairman Bhadresh Dodhia, ET Bureau reported.
The traders’ body has called the current situation in the Red Sea a major cause for concern which could affect the textile industry for a significant amount of time. Increased shipping times and costs could impact textile exports from India and disrupt the global supply chain and economy, according to Dodhia.
The Red Sea is one of the world’s most active trade routes and includes the Suez Canal which connects Asia with Europe. Due to the diversion, freight rates from India to parts of Europe have increased by around 40% and could become even more expensive. This would increase costs in the Indian textile industry which would reduce profits which were only just beginning to stabilise following the effects of the Covid-19 pandemic.
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