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G. Gurumurthy

Coimbatore , Sept. 30

THE domestic textile engineering industry continues to be dogged by falling share of its supplies of machinery to the user-industry compared to the total demand for textile machinery.

Though the Textile Engineering Industry (TEI) recorded a 10 per cent rise during 2002-03 in the value of machines produced at Rs 1,175 crore compared to Rs 1,072 crore in the preceding year, this growth cannot be construed as positive if the inflation rate that prevailed and the lower production levels recorded during the previous year are taken into account, the Textile Machinery Manufacturers Association (TMMA) has said.

According to the TMMA's latest annual report, the total domestic demand for textile machinery in 2002-'03 was estimated at Rs 2,619 crore, of which imported machinery constituted Rs 1,844 crore. The supplies from the domestic industry amounted to only Rs 775 crore, aggregating only 30 per cent of the total demand. Though the 2002-'03 fiscal has seen supplies from indigenous machinery producers going up to Rs 775 crore (Rs 645 crore), their percentage share in total supplies actually came down to 30 per cent compared to 34 per cent share previously. This was because most of the demand was met through imports. (Imports of textile machinery during 2002-'03 went up to Rs 1,844 crore as against Rs 1,232 crore in the previous year.)

This worrying trend, according to the TMMA, calls for urgent restructuring of the TEI to render it more competitive and technologically relevant.

The TMMA's outgoing Chairman, Mr G.T. Dembla, in his address at the 43rd AGM held in Mumbai last week has asked the Centre to set up a taskforce immediately under the Textile Commissioner to study the status of the industry and make suitable recommendations.

He suggested three quick interventions to set right the lopsided support meted out to the domestic TEI: directing financial institutions to extend working capital at PLR to enable competitive pricing of products, updating the TEI technology levels through commissioning of an update fund such as the TUFS instituted for the textile industries, and streamlining the fiscal duty structure that denied level-playing field to TEI vis-à-vis imports.

The distortions in customs duty on imported finished machines vis-à-vis the imported inputs that go into manufacture of indigenous machinery and components were worrying. So is the expanding list of specified items of machinery at concessional 5 per cent customs duty. "Import of specified textile machines including parts/accessories are permitted at 5 per cent concessional customs duty whereas the same machines that are being produced within the country are not eligible for similar concessions on the imported inputs except for the dedicated items falling under chapters 84/8/90," the TMMA Chairman said.

The textile machinery exports from India during 2002-'03 was estimated at Rs 400 crore as against Rs 427 crore in the previous year. The exporters faced stiff competition in international market as they were not able to offer matching credits with long-term repayment facilities.

Mr Dembla hoped that more than 70 Indian manufacturers would participate in the 14th international textile machinery fair to be held in Birmingham, UK, next month.

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