The newly elected chairman M Senthil Kumar of Southern India Millsâ€™ Association (SIMA) at its 56th Annual General Meeting held yesterday, said that as the textile industry was equiped with excess production capacity it first and foremost urgently requires market access policy to have a level playing field in global markets.
Therefore, the government should expedite conclusion of Free Trade Agreements with China, EU, Australia, Canada and other countries and gain market access, he added.
Kumar urged the government to extend three percent incentive for yarn, five percent for fabrics and seven percent for garments and made-ups till FTAs were signed as provisional package, as the interest rate in India was between 12 percent and 14 percent.
He also sought extension of three percent interest subvention for all textile products to have a level playing field.
As textile exports has declined in August 2015 for the ninth straight month by 20.66 percent with overall exports reaching $26.8 billion, while exports of cotton textiles registered a negative growth of 7.39 percent as exports touched $863.18 million in August, as against $932.02 million in August 2014,
Continuing decline in exports is a serious concern and the Centre needs to take urgent action as major importing nations like EU, Canada, China are giving preferential access to competing nations like Bangladesh, Cambodia, Pakistan, South Korea, Turkey and Vietnam.
He also seeks removal of import duties, anti-dumping duties and reduction of Central Excise duty on man made fibre from 12.5 percent to six percent, the association has sought expedite implementation of GST by covering textiles and clothing products under the lowest slab considering the nature of the industry (predominantly SMEs).
Another major policy decision required for smooth going of the industry was to extend subsidies directly to cotton farmers and de-link Cotton Corporation of India from cotton trade, Kumar said.
Kumar requested the government to allocate Rs 6,500 crore as already recommended by the Textiles Ministry to clear all pending Technological Upgradation Fund subsidies, including blackout period, committed liabilities and to keep the scheme live till March 31, 2017 and bring it in a new format in the next five year plan.
He said that abnormal duties imposed on Indian textiles are severely affecting Indian exports.
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