Concerned over unchecked import of second hand textile machinery, domestic manufacturers have asked the government to stop fiscal sops on imported technology, particularly from China.
"The imports of second hand/used loom and cheap Chinese looms are the greatest hurdles for indigenous development," the Textile Machinery Manufacturers' Association (TMMA) said in a pre-budget memorandum submitted to the government.
It said the Planning Commission has also observed that no subsidy should be allowed for import of any second hand capital goods.
A TMMA delegation recently met Textiles Minister Dayanidhi Maran here and suggested that unrestricted import of the textile machinery in second hand condition should be discouraged.
"The government should not be a party to the technological obsolescence as technology changes in every three-five year period," it said, adding that such imports should not be given subsidy under the Technology Upgradation Fund (TUF) scheme.
The delegation, led by TMMA Chairman Anuj Bhagwati, noted that second hand imported waterjet looms are least more than 15 years old. However, these looms are being given the TUFS benefits, which include interest subsidy.
"We are being burdened with decades-old technology that is less productive, consumes more electricity and is high maintenance," it said.
About 1,354 second-hand looms were imported in 2008-09. The other TMMA suggestions for the 2011-12 Budget include removal of distortions in the excise duty structure.
It suggested uniform rate of eight per cent excise duty on all items of textile machinery. The duty on parts and components and accessories should be less than four per cent to promote its indigenous development.
At present, duty on textile machinery in general is at 10 per cent while on some specific machinery it is four per cent. On raw material, parts and components, it is eight per cent.
Likewise, there are two levels (7.5 per cent and five per cent) of customs duty on machinery imports. The TMMA has suggested uniform rate of 7.5 per cent. Besides, the duty on raw material, parts, components and accessories should be less than that on complete machinery.
