NITI Aayog’s plan emphasizes rate cut on synthetic fibres
Mumbai: NITI (National Institute for Transforming India) Aayog, a Government of India policy think-tank, has released its three-year (2017-20) action…
Mumbai: NITI (National Institute for Transforming India) Aayog, a Government of India policy think-tank, has released its three-year (2017-20) action plan.
The Aayog’s plan includes easing entry barriers and slashing duties on synthetic fibres. This will be a big support to the Indian textile industry, if implemented, in the light of the growing competition from Bangladesh and Vietnam to import synthetic fabrics at a lower price from other countries. Even Sri Lanka is doing fairly well in this segment and emerging as a tough competitor.
India’s poor performance in apparels made from synthetic fibres has disturbed NITI Aayog, considering that global market for this segment is quite large compared to cotton clothing. The organisation believes, “Easing barriers on input import, enhancing trade facilitation and improving market access will promote apparel exports and generate jobs in this industry.”
The plan can be seen as a relief to the industry after the recent declaration of GST rates on synthetic yarns and fabric being 18 per cent while cotton yarns and fabric enjoy a minimum 5 per cent.
As per the figures available, China, India’s biggest competitor, imported US $ 2.3 billion worth MMF while India imported only US $ 296.6 million worth of MMF. A potential alternative to importing synthetic fibres from overseas can be the booming domestic industry. Even the local industry faces impediments of high customs duties and anti-dumping duties on synthetic fibres. The NITI Aayog plans to ease import norms within the country as well.
The Aayog’s action plan also aims to improve logistic services at Coastal Employment Zones (CEZs) to ease trade operations. Completion of trade agreements with EU and UAE is also on the cards of the organisation.