The Finance Ministry in India has extended by one year the validity of anti-dumping duty on nylon filament yarn from China, Chinese Taipei, Malaysia, Indonesia, Thailand and South Korea. The revenue department has also extended by one year the validity of anti dumping duty on Saccharin imports from China. The anti-dumping duty on both these products would be valid till January 12, 2018, the revenue department has said.
The Indian textile industry has been demanding a level-playing field with respect to cotton for a long time now and some rationalisation is expected from budget 2017-18. The textile industry wants the next Union Budget to reduce the excise duty on manmade fibres and bring it on par with that of cotton. The argument is that garments produced through manmade fibres are primarily used by the economically weaker sections of society. The manmade fibre requirement of the Indian textile industry is expected to jump by at least five times by 2025 from what it is now. Yarns made of polyester and synthetics are in good demand. fibres like nylon and polyester have an excise duty of 12.5 per cent while for other yarns like cotton the excise duty is negligible. The industry also wants a 20 per cent excise duty subsidy on handicrafts and handloom sector goods destined for export to the US and East Europe. A long term plan to boost textile exports from India would enable India to pull ahead of China by 2020. GST will also come into the picture soon.
This budget is going to be the most widely watched budget in a long time due to factors such as change in the day of the presentation to the 1st day of February, merger of the railways budget into the union budget, expected tax sops after demonetisation, etc. From the Indian textile and allied industries point of view, the government needs to boost domestic demand and reduction in income taxes would definitely help. Textile exports is facing increasing competition from Bangladesh and Vietnam, which have robust government policies supporting the local textile industry. The government also needs to give much better incentives to the textiles industry especially for machinery upgradation and preferential industrial power rates.