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Rationalization of duty structure for synthetic fibers & filament expected

26
Feb '07
Indian Textile Industry is now a $50 billion industry, with export contributing exceeding $18 billion. It is the largest employer across the value chain from Fiber to Apparel and continues to offer high potential for job creation.

Quota phase out in 2005 offered barrier-free access to Global Markets but as expected, market access was at the cost of intense competition and price cuts affecting profitability. But, undeterred by the pressure, the industry witnessed large flow of investment availing the benefit of 5 percent interest subsidy under the TUF Scheme before the expiry of Scheme on March 31, 2007.

The gradual shift to organised retail and large commitment of investment in Indian Retail Industry will certainly be an enabler for the Indian Textile industry for accelerating growth of domestic market for textile.

Industry continues to suffer from one disadvantage of heavy duties on non-cotton/synthetic fibers. As a result, share of synthetic fibers continues to be at 40 percent against the world benchmark of 60 percent of total fiber consumption. It makes affordable textile costly and render Indian manufacturer of blended and synthetic textile non-competitive vis-à-vis their counterpart China, Pakistan.

What do we expect in this budget for textile industry?

As market enablers, it is imperative that the handicap for the synthetic fibers which was getting reduced will be fully eliminated with rationalization of the duty structurefor synthetic fibers and filament. It will certainly give a boost in export as India would be able to compete in categories other than cotton, expand the export basket and increase both growth and share in the world market. At the same time, affordability of synthetic textile would lead to higher consumption in the domestic market.


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