CVD stalls plans of weaving industry

The re-imposition of 8 per cent countervailing duty (CVD) on shuttleless looms in Budget 2008-09 will affect the domestic weaving industry and stall expansion plans.

The textile industry has said while the duty is aimed at protecting the domestic manufacturers of the equipment, the move makes no sense as most shuttleless looms are imported.

"Most shuttleless looms are imported. There is no reason for imposing CVD on it," said DK Nair, secretary general, Confederation of Indian Textile Industry.

This decision will also affect some units that will come up under the Scheme for Integrated Textile Parks. One such park is the Kaveri Hi-tech Weaving Park in Tamil Nadu where weaving units are coming up.

Powerloom Development and Export Promotion Council Chairman MS Mathivanan said: "The CVD on shuttleless looms will affect over 50 units which are expected to come up in the park."

Textile industry representatives say they will request Finance Minister P Chidambaram to withdraw the duty.

There are over 50,000 shuttleless looms in the country. Shuttleless looms are seen as advanced machines capable of producing superior quality fabric and higher output.

"Buyers give preference to textiles manufactured from units that have shuttleless looms. So, even as entrepreneurs plan to modernise their units, the CVD will have an adverse impact on the expansion plans of the weaving units," said Mathivanan.