The Hindu Business Line : Textile mills seek cut in cotton import duty

Coimbatore, Dec. 6 The textile industry has sought from the Union Government a series of measures, including moratorium on loan repayment and reduction in cotton import duty, to save the industry from the crisis looming over it.

It is also sore that the Government has not taken any significant steps to revive the domestic textile industry with capacity utilisation down by nearly 20 per cent.

In a statement issued here, Dr K.V. Srinivasan, Chairman, he Southern India Mills Association (SIMA), Coimbatore, said the sops announced for the textile industry, like reduction in customs duty for manmade fibre and additional subvention of packing credit, would provide only marginal relief.

“Negative step”

He said the reduction of customs duty by 5 per cent on spun yarn of manmade staple fibre “is a negative step” taken by the government and it would “totally erode the competitiveness of the synthetic spinning sector” that was already facing the threat posed by cheaper imports from countries like China.

The industry was asking the government to abolish duty on manmade fibre and also imposition of anti-dumping duty on synthetic spun yarn to protect the domestic synthetic spinning sector. The move of the government has come as a “rude shock” to the industry.

He regretted that the Government had not taken any steps to revive the domestic sector. Due to market slump, the yarn stocks had doubled and “capacity utilisation had gone down by 20 per cent in majority of the units”. The problem was aggravated by the severe power shortage and high cotton prices, particularly for the mills in Tamil Nadu.

Mr Srinivasan requested the government to immediately restore the customs duty on manmade staple fibre spun yarn to 10 per cent and abolish import duty on manmade staple fibres to enable the synthetic spinning sector compete with countries like China.

The government must abolish 1 per cent export incentive offered for cotton, reduce cotton import duty from 10 per cent to 5 per cent, and exempt cotton from special CVD of 4 per cent, apart from exempting cotton from CST which is not VATable, to create a level playing field.

He urged the government to reduce the bank interest rates by 5 per cent.

More Stories on : Textiles | Excise and Customs | Tamil Nadu

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