Given the rising significance of synthetic fabrics in the global apparel scenario, the Indian Textile Ministry, in consultation with finance and revenue departments, is examining the possibility of a duty cut on man-made fibre. Currently man-made fibre draws a net excise duty of 29 per cent and goes up to 46.3 per cent in case of Viscose fibre due to an anti-dumping duty. Similarly, among Southeast Asian nations, India has 5-10 per cent customs duty on many of the fibres, while its competitors such as Thailand, Indonesia and Vietnam have lower duty structures ranging from zero to 5 per cent. “We are pursuing the matter with the Ministry of Finance. Since the proposal is for a rate cut, which is an issue of revenue loss for the government, it is taking time,” said SK Panda, Secretary, Ministry of Textiles.
The high cost of man-made fibres is proving to be detrimental to the competitiveness of Indian goods. Going by the statistics, Indian apparel manufacturers are importing man-made fibres worth Rs 900 crore despite the fact that the cost of imported fabric equals the cost of domestically produced fabric. It is mainky because of the lack of local vendors. Although India exported Rs. 2,480 crore worth of man-made fibre goods in April this year, it registered a drop of 6 per cent compared with the same period last year. With leading global fashion chains like Walmart, Next and s.Oliver being the major buyers of man-made fibre goods, a growing dent is expected in the absence of rate cuts, as Indian apparel exporters are already losing out business to neighbouring countries like Cambodia.
