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NITMA appeals 10% custom duty on manmade yarns

Jan 25, 2021
NITMA appeals 10% custom duty on manmade yarns

Sanjay Garg, President, North India Textile Mills Association (NITMA), deeply admired the vision of PM Narendra Modi, the ministry of finance, and the ministry of textiles for numerous steps taken to spur the domestic textile sector as an opening remark. 

He then appealed for the urgent need of raising customs duty on manmade yarns to 10 per cent, which is currently at 5 per cent. Referring to the data included in NITMA’s last press release wherein the concern regarding unreasonably low priced imports were raised. Based on the data, following are the primary issues confronted by domestic MMF industry: 

·       Monthly average imports of Virgin Polyester Spun Yarn have increased by 972 per cent from 2015 to 2020. Imports from Vietnam alone have increased by mammoth 10,512 per cent, that is, 107 times. 

·       Average monthly imports for 2020 are 5,212 tonnes/month out of the total domestic monthly consumption of 22,000 tonnes/month, which means that imports enjoy 25 per cent of the total market  share. Moreover, this trend is increasing with great speed. 

·       Import numbers have been rising substantially year after year due to an extremely and unreasonably low prices offered by Indonesian and Vietnamese spinners on account of huge idle  capacities created owing to their government’s incentives.

Representations, on the above were also sent to ministries of finance and textiles. 

Garg further elaborated, “that manmade yarn sector which is one of the largest employment generating segment within the textile industry and it’s highly capital and labour intensive industry as well. The unreasonably low-priced imports of manmade yarn into India have been causing considerable amount of injury to domestic manufacturers for last 5 years or so. Industry has deep  concerns over the rise in import quantities being dumped into India, which can potentially cause permanent damage to domestic MMF sector with the cascading effect, from closure of units to NPA’s,  and eventually resulting huge employment loss.  “

As a recapitulation, he humbly appealed to the ministry of finance and ministry of textiles to consider  increasing the customs duty on man-made yarn from its present level of 5 to 10 per cent immediately in  the ensuing Union Budget 2021 for the growth and expansion of domestic MMF Industry and  to prevent mass level loss of employment.