The SIMA team met and submitted a memorandum to the Central Minister of Textiles with a set of 7 requests including removal of import duty on ELS Cotton.
Coimbatore: The SIMA Chairman, Ravi Sam has submitted a memorandum to the Central Minister of Textiles, Piyush Goyal with a set of 7 requests including removal of import duty on ELS Cotton.
The team met Textile Secretary U P Singh and apprised about the meeting with the Minister of Textiles and also about the cotton and yarn price issues.
The team met the Minister for Aviation, Jyotiraditya Scindia on Thursday and appealed to increase international flights at Coimbatore, which the Minister readily agreed to stating that Air India and Vistara will be introduced. Regarding the airport expansion, he advised Go TN to complete the acquisition of 628 acres of land to provide D category flights. Minister Shri L Murugan had arranged the meeting and accompanied the team.
In the memorandum, the SIMA Chairman has requested to consider removal of the import duty on ELS Cotton, reduce hank yarn obligation, revamp the Handloom Reservation Act, implement technology mission on Cotton 2.0 and other requests.
The following was requested for:
1) Removal of import duty on ELS Cotton
The Minister has been making concerted efforts to persuade the Ministry of Finance for the removal of 5 percent Basic Customs Duty and 5 percent AIDC and also 10 percent Social Welfare Cess levied on both the components amounting to 11 percent on Extra Long Staple Cotton. We appeal to the Minister that this process may be expedited and a separate Tariff Code may be provided under the Customs Tariff Act exclusively for ELS cotton (32.5 mm and above) imported from other countries, to create a level playing field and sustain our global share in the high value added market segments. You are also aware that exempting ELS cotton from the import duty will not have any impact on the farmers as they do not produce such cotton.
2) Reduce Hank Yarn Obligation
We humbly submit that for the current level of cotton yarn production, the actual requirement of hank yarn for the handloom capacities reported in the Handloom Census 2009-2010 works out to less than 10 percent. We have been pleading the Government for the last 15 years to reduce the hank yarn obligation to 15 percent so that the spinning, powerloom and handloom sectors could have a win-win strategy. We understand that based on the various inputs given to the Textile Commissioner, the Chairperson of Hank Yarn Price Monitoring Committee, the Office of the Textile Commissioner (O/oTxC) made a detailed study and the O/oTxC) has already recommended to reduce the hank yarn obligation from 30 percent to 15 percent with justifications. Therefore, the hank yarn obligation could be reduced to 15 percent immediately and facilitate Ease of Doing Business.
3) Revamp Handloom Reservation Act
At present, 11 textile items are reserved for production only by handlooms, violation of which is punishable with imprisonment up to six months and fine. Most of the varieties in the list are unviable to be produced out of handlooms and are practically produced out of powerlooms. Technically, it is impossible to produce the fabrics listed in the Act beyond certain thread count and width using handloom that are currently being produced by shuttleless looms.
It may also be noted that such fabrics are being imported freely from the neighbouring countries that hurt the powerloom sector seriously. It is submitted that the number of reserved items may be reduced to 3 or 4 immediately. In the globalized environment, such a control has become redundant. Therefore, we humbly appeal to the Minister to kindly consider reducing number of items from 11 to 3 or 4, prescribing the fabric construction details under Handloom Reservation Act to enable Ease of Doing Business.
4) Implement Technology Mission on Cotton 2.0
India was able to increase its cotton production from 178 lakh bales during 1999 to 398 lakh bales during 2013-14 and the area under cotton from 92 lakh hectares to 120 lakh hectares by taking advantage of the Technology Mission on Cotton (TMC) brought by the NDA Government led by the former Prime Minister, Late Shri Atal Bihari Vajpayee.
The Bt technology introduced for producing long staple cotton also helped the country to become the largest cotton producer in the world. Since TMC was closed during 2012, the cotton production, productivity and quality have started deteriorating year after year, though the country is able to sustain 125 to 133 lakh hectares of land under cotton cultivation.
The Government has recently allocated Rs.17,408.85 crores for MSP related accumulated loss incurred by the Cotton Corporation of India during 2014-15 to 2020-21. The vision of the Prime Minister 'Doubling the farmers' income' could be achieved very easily if we adopt the global best practices of cotton cultivation, as our productivity is around 500 kgs per hectare as against the global average of 773 kgs, while over 20 countries achieve over 1500 kgs per hectare. The Ministry of Textiles has already prepared a detailed note for TMC 2.0 and has forwarded the same with a recommendation for implementation to the Prime Minister.
We need to increase the cotton production, productivity and improve the quality on a war footing to make Aatma Nirbhar Bharat, a reality. Considering the increasing demand for cotton both in the domestic as well as in the global markets and future growth potential, the country may start facing shortage of cotton from 2023 if we delay in implementing TMC 2.0. Therefore, we humbly request the Minister to kindly take up the issue with the Prime Minister and implement the TMC 2.0 in the interest of 6.5 million cotton farmers and also over 75 percent of the jobs in the entire textile value chain.
5) Free Trade Agreements
a) Accelerate signing of FTAs
The major impediment for the Indian textiles and clothing manufacturers to compete in the international market attributes to high tariff barriers ranging between 10 percent and 26 percent. While competing nations enjoy duty free access in most of the global markets, the Indian T & C items are eligible to duty, thus making it uncompetitive for the Indian manufacturers to compete.
As a result, Indian export is stagnated. Manufacturing capacities created under various State Textile Policies are underutilized. Despite the Government’s initiatives by announcing the special garment package, it has not yielded the desired results on the export front. Therefore, it is necessary to conclude a pact with UK for Free Trade Agreement immediately, especially in the aftermath of Brexit, which would boost the exports considerably.
Further, the Government may expedite the process of discussion and conclusion of FTA with EU, Eurasia and USA.
b) Renegotiate bilateral agreement with neighbouring countries
It is an established fact that India is not able to compete with neighbouring countries like Bangladesh and Sri Lanka due to a one-sided benefit extended to these countries to export their goods free of duty into India. The Chinese and other countries have made huge investments in these countries. Today, the Indian textile industry has become uncompetitive due to tariff barriers.
Over 80 percent of the high value-added items are imported duty free from these countries by large retailers in the country, only due to the price advantage. Though Indian manufacturers possess high manufacturing capabilities, countries like Bangladesh which had a small share in the global trade, when these agreements were entered into, have currently overtaken India in their garment exports, taking advantage of the duty-free access. Therefore, it is essential to re-negotiate the regional agreements to sustain our growth.
6) Expedite implementation of proposed amendments in the Electricity Act
The Ministry of Power, Government of India, initiated certain radical changes in the Electricity Act to reform the power sector. We appeal to the Minister to kindly recommend expediting the proposed amendments in the Electricity Act for the benefit of all the stakeholders.
7) Announcement of new National Textile Policy
The existing Textile Policy is over 22 years old and the Government has been strongly considering release of a new Textile Policy from the beginning of 2014, when the NDA Government came into power. Though the draft policy is ready, the same was delayed due to various reasons as the Government was planning to come out with numerous innovative schemes like PLI Scheme, PM MITRA Scheme, Processing Cluster Development Scheme, Technology Mission on Technical Textiles, PowerTex India Scheme, etc.
As the Government has proactively addressed most of the long pending issues including historical tax reforms for textile industry, implementation of RoDTEP Scheme, removal of anti-dumping duty on MMF, etc., we humbly appeal to the Minister to kindly release the new Textile Policy at an early date.”