The Hindu Business Line : `Widen list of textile machinery eligible for 5% import duty'

"There is a need to step up the investment in the industry and already substantial investment plans have been chalked up in textile processing and apparel manufacture which stand to attract larger capacity creation. Hence the need to widen the list of machines allowed under the five per cent import duty route.''

Coimbatore , Dec. 6

THE Cotton Textiles Export Promotion Council (Texprocil) has asked the Centre to widen the list of textile machinery imports eligible for the concessional five per cent customs duty to cover all machinery that are compatible with the technology upgradation fund scheme (TUFS) investment.

The council has made this request in order to give momentum to the pace of investment being made on value-added textile manufacture and also to overcome the growing mismatch between demand for quality machinery and timely availability of the required machines through indigenous sources.

At present, the five per cent concessional import duty is restricted to specific textile machinery and this list is perceived to be narrow and excludes some of the choice machinery preferred by the textile enterprises, especially in the high-end textile processing and finishing lines.

Mr Patodia told Business Line that his council has also asked the Ministry of Textiles to extend the operation of the TUFS, which is to expire by end-March 2007 for a further three-year period to coincide it with the Eleventh Plan Period.

With opportunity for India to scale up its volume of exports for the world market opening up, the domestic textile sector is constrained by the delay in delivery schedule for the machines booked with indigenous machinery manufacturers, most of whom are locked up with full orders and would take minimum 18 to 20 months to fulfil the order.

The Texprocil's committee of administration, which met here on Monday to review the sector's performance, reviewed the post quota trend for India's cotton textile items.

"India's export to EU between January and September 2005 grew at 16 per cent (against China's growth of 45 per cent), while its textile shipment to the US this year rose 28.6 per cent (China - 82 per cent). This showed the growth of the country's exports is on right path, though there is an urgent need to boost investments to enable it to realise greater potential in specialised product manufacture and production processes,'' Mr Patodia felt.

On cotton yarn exports, the council has become aware of the limitations for exports in an era when the export market has increasingly preferred to import finished goods.

Despite this, India's yarn shipment for the current calendar year is likely to close the 410-million kg mark, almost the same as in the previous year and between January and June 2005, the volume was around 204 million kg.

Many yarn producers find the local market more attractive than the export market because many textile producers who have improved the post spinning facilities by technology upgradation are in a position to absorb quality yarn for their export production.

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