The Hindu Business Line : Rising yarn exports: `Small spinners finding more pockets of sale'

Rising per capita cloth consumption, widening scope for the country's small enterprises entering into partnership with textile importers in Europe and exemption from Cenvat duty structure for cotton textiles have pointed to favourable business opportunities for small and medium textile industry, according to South India Small Spinners Association (Sisspa).

India, whose cotton yarn exports during 2005-06 touched 27 per cent in the global yarn trade, is increasingly seen as global yarn outsourcing destination. Though not many Sisspa member-mills are directly involved in yarn exports and only bigger yarn producers figure in export trade, this has of late created adequate `pocket of sale' for the small-scale spinners in catering to the domestic yarn market, said Mr K.R. Selvakumar, the outgoing President of Sisspa.

Italy tie-up

Addressing the 15th annual general meeting of the Sisspa here, Mr Selvakumar said in a recent meeting the Sisspa office-bearers had here with a representative from the Federation of Indian Chamber of Commerce and Industry in Italy, it was revealed that Italy presented scope for India's small textile enterprises to establish business partnership with Italian companies which have smaller capacity production units such as garmenting and processing.

Italian enterprises would be willing to transfer their plant and machinery to the Indian entrepreneurs to work on business partnership, particularly in wet-processing industry.

Proactive measures

While the removal of `Cenvat' duty on cotton textile industry had enabled faster revival of the textile industry, the opportunity for value addition in the wake of modernisation of the domestic textile industry through technology upgradation fund scheme (TUFS) and the jump in the country's textile fabric consumption from 19 metres to 22 metres would augur well for the future of the industry.

But the textile industry looked for certain proactive measures from the Government. Extending the TUFS, timely release of the TUFS interest subsidy to the beneficiary-industries, lowering of the customs duty on high-tech but used spinning machinery imports and encouraging higher cotton output within Tamil Nadu through release of high-yielding crop varieties would go a long way in improving the competitiveness of the industry.

While thanking the Tamil Nadu Government for removing the sales tax on hank yarn, the Sisspa also urged the State Government to do away with the four per cent sales tax on cotton sale and the four per cent tax on cone yarn sold to the powerloom weavers.

The spinning mills imported raw cotton from other States and when the quality of the cotton supplied to them was found inferior, they are returned as `reject'. But in such incidents, these rejected cottons are subjected to local tax/penal tax by the commercial department. The Sisspa, therefore, wanted the concerned authorities to come out with suitable procedure to handling cotton rejects to overcome the present difficulties.

Mr Narayanasamy, former President of Sisspa, said the spinning industry in Tamil Nadu had to bear 20 per cent peak-hour consumption charge levied by the State electricity board whose power tariff is also higher compared to the tariffs from other neighbouring States. This increased the operating cost to the textile units in the State, he added.

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