An apex body of the textile industry, Indian Texpreneurs Federation (ITF) has suggested the Centre to remove the hank yarn obligation.
It gave suggestions in a letter to Prime Minister Narendra Modi, as part of ease of doing business in the textile industry and said there was excess production of hank yarn due to a rise in spindlage. However, consumption had come down drastically due to growth of the power loom sector.
D Prabhu, ITF secretary said mills have to produce 40 per cent of the total production as hank yarn for supplying to the handloom sector. He said that the Textile Ministry has appointed an expert committee to study this, however, the report has not been released and its continuation would lead to enormous corruption.
Prabhu added that though Textile Commissionerate has released Expression of Interest from audit firms to clear the arrears, nothing has taken off and the matter has gone into cold storage again as there was delay in disbursement of Technology Upgradation Fund subsidy worth crores. Indian blended textile products are not competitive in world markets due to high excise and import duty.
The products would become competitive with international prices with rationalisation of duty, which would help push demand, since man-made fibre cotton blended products are growing exponentially in India and abroad, said Prabhu. Besides, ITF said that that there was an urgent need for textile-focused Free Trade Agreements with existing and emerging markets.
In the Goods and Service Tax (GST), it wanted the government to accommodate textile in the lower slab of taxation, which would transform the economy and provide exceptional growth.