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Anna Peter

Mumbai , March 18

TEXTILE engineering industry is expecting a 25 per cent increase in production in 2005-06.

In the last few years, the industry was affected by poor order book positions and impacted by the turmoil in the textile industry.

However, now it is witnessing a good order book positions and has posted a 14 per cent increase in production at Rs 1,339 crore in 2003-04 over Rs 1,175 crore in the corresponding previous period.

The industry's comfortable order book position is also being attributed to the cotton textile segment being given the choice to opt for or against the Cenvat excise duty of eight per cent. While the textile engineering capacity utilisation improved to 44 per cent in 2003-04, the corresponding demand from the domestic textile industry was hardly 28 per cent, the rest accounted for by imports.

This year, it is not likely to exceed 35 per cent of the total demand of the textile industry.

The Vision 2010 document released recently predicts that investments in plant and machinery (excluding the garment sector) in the next seven-eight years will be Rs 1,15,000 crore.

However, according to Mr Sanjay Jayavarthanavelu, Co-Chairman, Federation of Indian Textile Engineering Industry, issues such as lowering excise duty on textile machinery, parts and accessories from 16 per cent; lack of a level-playing field where producing and supplying machinery at reasonable prices is concerned and the import of specified machinery at concessional rates of duty were affecting this sector. Transactions costs also needed to be lowered.

He added that a scheme similar to the TUF should be created for the textile engineering industry.

According to Mr C. Arunachalam, Export Manager, Lakshmi Machine Works, further lowering of Customs duty on textile machinery and components would mean increased competition within the domestic market. Local players would even prefer foreign machines over indigenous products.

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