The government is considering a proposal to abolish countervailing duty (CVD) on import of technical textile machinery used to produce optical and glass stable fibers. The 16 percent CVD on machinery increases its cost and is considered as a hurdle by the entrepreneurs in setting up technical textile units in India.

As most machinery used for technical textile manufacturing is not produced in the country, units have to import them. Some kinds of technical textile machinery are already imported under a concession in Customs duty of 5 percent. More items are likely to be included under this head. A comprehensive list of technical textile machinery should be covered under concessional customs duty.

The technical textiles industry offers tremendous opportunities for joint ventures and foreign direct investment. The segment-wise market size of technical textiles in India is estimated to attract investment to the tune of Rs 43,700 crore by 2010. Under the existing Customs tariffs, fabrics, garments, and made-ups attract a specific rate of duty. A specific rate of duty is levied to protect the interests of the indigenous industry from cheap imports.

A textile ministry official pointed out that specialised fibres and yarn such as aramide, chronic fibers, optical fibers, and glass staple fiber were not produced in the country. An expert committee on technical textiles has also recommended granting concessions on import of these fibers and yarn. The textile ministry has proposed to the finance ministry to permit import of these fibres at a concessional customs duty of 5 percent and also exempt them from CVD.

Mr. Rakesh Joshi

Joshi Enterprise

Manager, Joshi Enterprise
Dispur, India

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