Forthcoming Budget may see announcement of measures by Government to enable domestic textile and clothing sector to become globally competitive.
These measures may include lowering of import duty from existing 12.5 percent to 5 percent on all machinery segments, reducing excise duty from 16 percent to 8 percent and Technology Upgradation Fund Schme (TUFS) extension.
Implementation of these measures will help meet immediate requirements of the sector as well as strengthen domestic textile industry to capture international textile and clothing market worth $110 billion by 2012.
India imports over 70 percent of its machinery requirement as domestic capacity is inadequate to meet requirement, sources in the Finance Ministry confirmed the move.
The industry requires around 29 million spindles, including 8.9 million for modernisation during 2007-12 period, involving an total outlay of Rs46,000 crore.
Fiscal levies once rationalized will help reduce cost of investment which in turn would boost spun yarn production to 6.60 billion kgs by 2012, which is pegged at 3.39 billion kg this fiscal. GET LATEST UPDATE ON UNION BUDGET 2007-2008
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