SIMA Seeks Incentives To Promote Textile Sector

SIMA Seeks IncentivesA delegation of Southern India Mills Association (SIMA) has submitted a memorandum to union textile minister, Santosh Kumar Gangwar demanding several post-budget measures to promote the textile sector.

Those included higher allotment for the Technology Upgradation Fund (TUF), removal of duties on man-made fibres, shuttleless looms, early announcement of a foreign trade policy and the creation of a level playing field for the sector vis-a-vis other textile exporting countries.

The industry had demanded Rs. 3,500 crore in the union budget for the ongoing TUF schemes to meet liabilities of the last three quarters of 2014-15 and for the entire 2015-16 year. But the allocation was only Rs. 1,520 crore, which may not be enough to meet requirements even for 2014-15, SIMA chairman, T Rajkumar said in a release.

During the meeting with SIMA delegation, Gangwar promised to take up the matter with the finance ministry and ensure adequate funds in due course, Rajkumar said.

It is also essential to reduce the central excise duty on man-made fibres from 12 to 6 per cent on par with cotton and remove the five per cent import duty and four per cent special additional duty to enable the Indian textile industry to achieve substantial growth in the synthetic-textile product market as this segment has not achieved any growth for some time, he said.

The association sought the removal of six per cent central excise duty on shuttleless looms as state-of-the-art technology looms are not manufactured in the country.

The central excise duty is counterproductive when the government provides 15 per cent capital subsidy or 30 per cent margin money subsidy to encourage technology upgradation in the weaving sector, where outdated technology affecting the value chain, SIMA chairman said.

Also, imported looms are costlier by 10.36 per cent due to the six per cent countervailing duty and four per cent special additional duty.

Early announcement of the foreign trade policy with incentives for the textile industry is essential if the global opportunities in the sector are to be grabbed, he pointed out.

The delegation also urged the minister to create a level playing field in the liberalised era. The government can withdraw all subsidies and incentives once the textile industry is able to source raw materials at international rates and when tariff rates in different countries are brought on par with competing nations, Rajkumar added.

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