Southern India Mills Association (SIMA) has appealed to the Centre to take immediate steps to create a level-playing field for the sector as domestic textile industry is facing recession for the last 15 months.
“In the absence of a level-playing field due to higher rates of duties for Indian textile products in various major international markets, higher raw material cost, high cost of funding and high transaction cost, the industry is not in a position to achieve its potential growth rate.
“Under these circumstances, it is very essential for the central government to come out with a policy initiative to strengthen the competitiveness of the Indian textile industry,” SIMA said. The measures include making raw material of both cotton and synthetic fibres available at a slightly lower or on par with international price.
SIMA chairman, T Rajkumar at a press meet appealed for expediting free trade agreements (FTAs) with all the major textile importing countries particularly China and EU and make the tariff rate slightly lower or on par with other competing nations.
He requested the centre to allocate Rs 6,500 crore to clear all pending cases and the existing committed liabilities of TUFS, and to announce National Textile Policy at the earliest. Rajkumar also pitched for early rollout of GST and requested the government to bring textile products under lowest rate of GST as the textile is a low profit margin industry.
Such measures, if taken, would enable the industry to achieve the growth rate of 25 per cent to 35 per cent in the short run and 20 per cent growth rate in the long run.
Rajkumar said Vietnam and Cambodia have zero duty access and Pakistan has zero duty access for fabrics and 5 per cent duty for garments and made-ups in China while the Indian yarn attracts 3.5 per cent duty, fabric attracts 8.5 per cent duty and made-up and garments 14 per cent duty.
He pointed out that the global recession had pushed the Indian textile industry to the corner and India had become the least preferred Nation in textile trade due to higher rates of duties.
The SIMA chairman criticized the cotton trade policy of Cotton Corporation of India, which have been doing significant damages to the Indian textile industry particularly the SMEs, and favouring only the multinational cotton traders.