New Delhi: The textile industry has intensified its efforts to get duty on man-made fibres removed in the budget itself, even when the textile ministry is in the process of setting up an expert group to examine the issue.
In its pre-budget memorandum to finance minister Pranab Mukherjee, the Confederation of Indian Textile Industry (CITI) said, “Excise and customs duties on all man-made fibre may be removed. Countervailing duties imposed on import of all fibres may be removed, since access to cheaper global fibres will improve cost-competitiveness.”
Textile minister Dayanidhi Maran had last week said an expert group would be appointed within 100 days to chalk out a roadmap for the fibre-neutral policy.
He said the new policy should be in place within a year.
While there is no customs duty on cotton, the import of synthetic fibre attracts 5%, putting the user of the man-made fibre at a disadvantage.
CITI has asked for a special export package, since 50% of total production in the sector gets exported.
“The significant decline in demand in major markets and additional incentives introduced by our competitors during the last one year, make it essential that the industry be assisted with proper policy to make it more competitive,” it said.
CITI has also demanded that the export sop of 5% announced under the Vishesh Krishi Gram Udyog Yojana for raw cotton till 30 June this year be terminated apparently to boost domestic supply for millers.
The industry has sought exemption from the fringe benefit tax, levied around 7% of income, for textile and clothing units, saying “sluggish markets necessitate extra marketing efforts including foreign travels”. FBT makes such efforts costlier and adds to the losses of units, it added.
Further, it said, textile exports have declined by over 10% in 2008-09, the industry has asked for working capital loans at a concessional interest rate of 7% in order to partly bridge the gap between the cost of working capital in India and in other countries.
The industry has also demanded a budget allocation of at least Rs3,500 crore under the Textile Upgradation Fund Scheme (TUFS) for this fiscal, that includes backlog of Rs2,200 crore.
Moreover, interest subvention of 4% may be allowed on export credit for textile exporters till the end of this fiscal.