Competitive pressure from China lug textile sector
23 May '06
1 min read
Government has realized that country's textile exports are struggling to cope with the competitive pressures from China.
Several proposals are being analyzed to develop the industry.
Nevertheless, the proposals need to fulfill certain criteria including transition to an integrated goods and services tax with effect from April 1, 2010.
The proposal to exclude the fabrics from Value Added Tax (VAT) category did not support the development of textiles as investment in plant and machinery would endow the producer with sizeable tax credits that cannot be achieved without VAT on the fabric.
Experts also believe that atleast 11 of the handloom categories should be included under the reserved sector that would promote domestic products.
Recent advancement in fashion designing is also expected to develop textile sector.
However, the man-made fibres (MMFs) and labour flexibility are two areas that need to special attention as this year's budget did much to end the perverse duty protection on them.
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