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New Delhi, Aug 16 (KNN) The underperformance of textile sector due to sluggish exports, poor domestic demand, and growing imports from Bangladesh and Sri Lanka has brought the India’s rich textile sector into danger.

The sector is going through a deep crisis because of various factors including uncompetitive fibre prices, declining exports, in-competitiveness of our products in international markets, embedded taxes not getting refunded, and lack of working capital, among others, said Sanjay Jain,  hairman of the Confederation of Indian Textile Industries (CITI).

Sharing his views with KNN India on the current situation of textile sector, he said to improve the situation state government should avoid incentivizing new spinning mills for three years to prevent existing units from turning into non-performing assets (NPAs) due to excess capacity.

It also wants special moratorium for spinning loans to ensure they don’t slip into NPAs due to the un-favorable environment.

In a press statement, Chairman of TEXPROCIL, Dr. K V Srinivasan stated that exports cotton yarn from India in the first quarter of April-June 2019 have fallen by a steep 33%.

He said that the steep fall has been caused by a variety of reasons including decline in exports to leading export markets like China, Bangladesh, South Korea and the duty free access given for import of cotton yarn by China to countries like Pakistan and Vietnam from April 1st, 2019.

He said that even though cotton yarn is a value added product, it has been excluded from the export benefits like interest subvention, MEIS and the ROSCTL schemes.

Srinivasan pointed out that even though cotton yarn is a value added product, it has been excluded from the export benefits like interest subvention, MEIS and the ROSCTL schemes.

In view of the above, the Texprocil Chairman appealed to the Government to include cotton yarn in the interest subvention scheme and also rebate the embedded taxes like Agricultural Cess, Mandi Tax, Power and Fuel Surcharge which incurred in the production process.

The ROSCTL Scheme which rebates these levies should be extended to cotton yarn sector at the earliest. This will ensure that only products are exported and not taxes. This will also provide the much needed impetus in the context of rising cotton prices & appreciating Rupee which are eroding competitiveness.

He further stated that in case the current trends of declining exports continue in the next quarter, it will lead to closure of several spinning units in the near future, resulting in layoffs.

Published On : 16-08-2019

Source : KNN India

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