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Saying that non-refund of TUF subsidies has impacted future projects, textile industry representatives in a joint memorandum have asked for a cut in duties to revive the industry.
For 'Make in India' to succeed in the textile sector, the government should ensure that raw material costs, costs of converting raw material to finished goods as well as the tariff should be less than or equal to international prices, they said in the memorandum.
The Southern India Mills’ Association (SIMA), Confederation of Indian Textile Industry (CITI), Cotton Textiles Export Promotion Council (TEXPROCIL), Indian Cotton Federation (ICF), South India Spinners Association (SISPA) and other stake holders submitted the memorandum to Nirmala Sitharaman, Minister of State (Independent Charge) for Commerce & Industry.
Industry also asked for removal of import duty, the special additional duty, reduction in the central excise duty from 12% to 6% and removal of the anti-dumping duty so that the industry and products become globally competitive.
India exports over 30% of its total production. The country's share in the global market for cotton yarn was 32.92% (China 18.54%), cotton fabric was 3.53% (China – 44.02%), cotton made-ups was 11.25% (China – 37%) and garment was 3.86% (China – 44%) during January to December 2013. The market share in man-made fibre and its blended textile segments is very low.
Made-in-India products are expensive by 20-25% due to the high fiscal levies on man-made fibres and also the pricing policies of the few fibre manufacturers in India.
"Our growth rate in textiles and clothing is very low mainly because we are not able to make significant progress on the synthetic fibre front,” they said.
"Mills operate with low return on investments and whenever the market improves and ROI improves, capacity addition happens quickly and once again it becomes stagnant due to short sighted policies,” they said in the memorandum.
The non-refund of TUF subsidies of projects worth around Rs 65,000 crore impacted operations, they said.
When the government stopped extending benefits during June 29, 2010 to April 2011, it created problems for the industry. They added that the textile ministry was surrendering huge funds to the government even though it was failing to meet TUFS requirements.
When the government stopped extending benefits during June 29, 2010 to April 2011, it created problems for the industry. They added that the textile ministry was surrendering huge funds to the government even though it was failing to meet TUFS requirements.
