In the backdrop of economic slowdown and recession, the Union Budget for the year 2020-21 was widely expected by the industry circles as how the proposals would address the problems of the industry and the impact that would facilitate the industry to mitigate the challenges and enhance global competitiveness of the textile industry. The textile industry has been demanding for the abolition of anti-dumping duty levied on PTA, the basic raw material used for the manufacture of polyester staple fibre and filaments, to remain globally competitive. The Ministry of Textiles has envisaged to increase textile business size from the current level of around US$ 169 billion to US$ 350 billion by 2025 and to US$ 650 billion by 2030 in its draft Textile Policy being formulated by the Government. This target could be achieved only by making the polyester fibre and filaments available at international price as the country has limitations to increase the fibre base within the country.
Reacting to the Union budget proposals 2020-21, Mr.Ashwin Chandran, Chairman, The Southern India Mills’ Association (SIMA), Coimbatore, has thanked the Hon’ble Prime Minister for favourably considering the long pending demand of the industry and abolishing the anti-dumping duty being levied on Purified Terephthalic Acid (PTA) imported from different countries including China, Indonesia, Taiwan, Iran, Malaysia. He has stated that the PTA attracts anti-dumping duty from US$ 27 to US$160 per metric tonne depending upon the country of origin and the country often faces shortage of PTA that curtail the capacity utilization of the polyester segment industry. He has said that this announcement has come as a boost for the PTA users and the entire man-made fibre textiles & clothing segment. He has stated that this would greatly help the country to enhance global competitiveness, boost exports and also enable domestic manufacturers to compete with cheaper imports. Mr.Ashwin also welcomed the proposal of curbing cheaper imports by imposing Rule of Origin and other safeguard measures on the FTA countries.
SIMA Chairman has welcomed the announcement of National Technical Textile Mission by allocating Rs.1480 crores for the next four years. He has said that as the country has been importing technical textiles to the tune of US$ 16 billion per year, this mission would help the industry to strengthen the technical textile segment taking advantage of benefits already extended under different State Textile Policies and also the Technology Upgradation Fund Scheme. He has also appreciated the enhanced allocation of Rs.761.90 crores for A-TUF Scheme as against Rs.700 crores allotted during the previous year.
Mr.Ashwin has hailed the announcement of the Schemes for Remission of Duties & Taxes levied on export products and NIRVIK for extending competitive credit facilities and higher insurance coverage with lesser premium and also simplified procedure for claim settlements. He has also welcomed the announcement of addressing inverted duty structure in the GST as textile industry has been suffering with huge accumulation of inverted duty of capital goods and certain services. The various announcements made including the abolition of dividend distribution tax paid by the companies, significant reduction in the personal income tax rate, Vivad Se Vishwas scheme enabling dispute settlement without any interest and penalty, simplification of appeal provisions, GST returns, income tax returns, etc., are also the welcoming features of the budget, says Mr.Ashwin.
SIMA chief while appreciating the various benefits and schemes announced for the farmers to double the income by 2022, has appealed to the government to announce a special scheme for cotton development. He has said that the Ministry of Textiles has already submitted a proposal for Technology Mission on Cotton – II in this direction. He has also appealed to the government to extend the corporate tax reduction extended for companies and cooperative societies to the partnership firms to have a level playing field and boost investments.