NEW DELHI: Problems related to refund of goods and services tax (GST) and slow demand in global markets would impact exports of handicraft and may lead to decline in shipments by about 3.5 per cent in the current fiscal, EPCH said.
Export Promotion Council for Handicrafts (EPCH) chairman O P Prahladka today urged the government to immediately start the refund of taxes due to liquidity crunch being faced by exporters.
“About Rs 3,500 crore is stuck and it is impacting handicraft exporters which are mainly in MSME sector. These delays and other reasons may lead to dip in exports in 2017-18 by 3.5 per cent,” Prahladka told PTI.
He said that the government is not fixing any timeline for the refund.
Exporters work on small capital and they are also not able to borrow from banks due to interest rates.
“We have also asked to increase interest subsidy to 5 per cent from 3 per cent,” he added.
In 2016-17, exports from the sector aggregated to Rs 24,500 crore. The segment employs about 7 million people directly and indirectly.
Major export destinations for domestic handicrafts items include the US, Europe, South America, Africa and China.
The US and Europe together account for about 60 per cent of the country’s total handicraft exports.
Main handicraft items exported by India include house-ware, home textiles, furniture, glassware, bamboo goods, fashion jewellery and lamp and lighting.
EPCH is organising a five-day fair in Greater Noida to attract overseas buyers.