In the light of the textile exports declining, the Southern India Mills Association (SIMA) has said that there is an urgent requirement for a policy for the textile industry to ensure access to global markets to enable it to have a level playing field in the face of a production glut.
India's textile exports declined in August 2015 for the ninth straight month by 20.66 per cent with overall exports reaching $26.8 billion, while exports of cotton textiles registered a negative growth of 7.39 per cent as exports touched $863.18 million in August, as against $932.02 million in August 2014, the newly elected SIMA chairman M Senthil Kumar told reporters in Coimbatore.
Describing the continuing decline in exports as a serious concern, he said the Centre needs to take urgent action to neutralise the adverse effects of preferential access given to competing nations like Bangladesh, Cambodia, Pakistan, South Korea, Turkey and Vietnam by major importers like the EU, Canada and China.
Abnormal duties imposed on Indian textiles are severely affecting Indian exports, he said. Kumar said the government should expedite conclusion of Free Trade Agreements with China, EU, Australia, Canada and other countries to enable India's textile sector to gain market access. Kumar urged the government to extend three per cent incentive for yarn, five per cent for fabrics and seven per cent for garments and made-ups till FTAs were signed as interim package, as the interest rate in India was between 12 per cent and 14 per cent. He sought extension of three per cent interest subvention for all textile products for a level playing field.
The new SIMA chief also requested the government to allocate Rs 6,500 crore which has already been 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.
Kumar called for removal of import duties, anti-dumping duties and reduction of Central Excise duty on man-made fibre from 12.5 per cent to six per cent and asked the government to expedite implementation of GST by covering textiles and clothing products under the lowest slab considering the nature of the industry (predominantly SMEs). The SIMA chairman also said that another major policy decision required for the smooth functioning of the textile industry was to extend subsidies directly to cotton farmers and de-link Cotton Corporation of India from cotton trade.