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Textile sector seeks two year extension under EPCG scheme
Jan '15
A joint memorandum has been submitted to the Union Commerce Minister, Nirmala Sitharaman by various Indian textile associations, seeking additional two years time to fulfill export obligation under the export promotion capital goods (EPCG) scheme.

According to the trade bodies, many textile mills were not able to fulfill the EPCG obligation due to global recession in many years in the past six years, hence additional time should be given and that the export obligation should be only six to eight times of duty saved.

The memorandum said Indian export share was miniscule in the global textile and apparel exports, due to various levies on manmade fibre made products. So, they requested removal of import duty, special additional duty and reduce central excise duty on manmade fibre and also remove anti dumping duty.

India’s share in the international market for cotton yarn was 32.9 per cent as against 18.54 per cent of China, in cotton fabric 3.53 per cent compared to 44.02 per cent of China, cotton made-ups 11.25 per cent in contrast to 37 per cent of China and in garments 3.86 per cent as against 44 per cent of China.

Saying that non-refund of TUFS subsidies has impacted present and future projects, they said the Centre should additionally allocate Rs 3000 crore for the scheme in the upcoming budget, since non refund of TUFS subsidies has put Rs. 65,000 crore worth of investments bleak.

When the government stopped extending benefits during June 29, 2010 to April 2011, it created problems for the industry, the memorandum stated and added that the textile ministry was surrendering huge funds back to the government, although it was failing to meet TUFS requirements.

The memorandum added that for 'Make in India' to succeed in the textile industry, the government has to ensure that raw material costs, costs of converting raw material to finished goods as well as power tariffs should be less than or equal to global prices.

Mills operate with a low RoI, and when market improves and RoI too improves, capacity addition happens quickly, which in due course becomes stagnant, mainly from short sighted policies, the textile associations observed in the memorandum.

Trade bodies who submitted the joint memorandum include Southern India Mills’ Association, Confederation of Indian Textile Industry, Indian Cotton Federation, Cotton Textiles Export Promotion Council, South India Spinners’ Association, Powerloom Export Promotion Council, Madurai Spinners Association and India Spinning Mill Owners Association. (AR)

Fibre2fashion News Desk - India

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