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NMCC proposal on machinery subsidies faces criticism
Sep '08
The National Manufacturing Competitive Council (NMCC) has recommended to provide subsidies for purchase of textile machinery to only those companies that buy from domestic suppliers.

However, some textile enterprises and government officials have regarded this proposal as impractical on grounds that India does not produce much of the critical equipment required for the manufacture of garments and textiles. It has been reported that Indian machinery meets only one-third of the requirement. Of the Rs10,000 crore worth of machinery installed in 2007, domestic companies met only 25 percent of the requirement.

Textile companies have benefited from the Technology Ugradation Fund Scheme (TUFS), since 1999. The NMCC has made a recommendation to restrict the subsidy, to spur the manufacturing sector and lift India's production, which has been averaging an annual 7 percent in the past two decades. India has nearly 700 machinery manufacturing units.

In an exclusive interview with Fibre2fashion, DK Nair, Secretary General of Confederation of Indian Textile Industry (CITI) stated, “if assistance under the scheme is restricted to machinery manufactured in India, this will render the scheme totally unviable. India has world class textile machinery for spinning which is purchased by most mills only from domestic producers.

However, we do not have acceptable levels of technology for weaving and processing machines. In fact, for all practical purposes, garment machines are not manufactured in India at all. Thus, investments under the scheme will be impractical if its benefits are restricted to purchase of domestic machines only.”

Fibre2fashion News Desk - India

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