JAN 2015 ISSUE

1. Suggestions ™ ISA ™ TEXPROCIL ™ SIMA ™ FAITMA ™TMMA ™ SRTEPC Cover Story : Pre Budget Memorandum ISSN NO.: 2278-8972 | RNI No.: MAHENG / 2012 / 43707 JANUARY - 2015 | Volume 3 | Issue 1 | Pages 56 www.textilevaluechain.com EU- GSP Scheme & impact / Challenges for EU companies for Technical Textile/ Roadmap to Exporter Trade Show / Conference Report Cotton Report / Fabric Report Fashion Forecast / New Appointments Show Calendar TEXTILEVALUECHAINJANUARY-2015Volume|Issue31

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3. www.textilevaluechain.com TEXTILE VALUE CHAIN | Jan 2015 1

4. TEXTILE VALUE CHAIN | Jan 20152 www.textilevaluechain.com EDITORIAL Shri V.Y. Tamhane Editorial Advisor By the time this issue falls in the hands of readers, the pre-Budget season must have come to and end. AlthoughallstakeholdersarenowthirstyoftheBudget, analysts, whether in the field or finance or textiles and our readers must be keenly interested to know the demands made by various organizations of the textile industry. The pre-Budget demands do help analysts to appreciate provisions made in the Budget. Hence, Textile Value Chain has decided to present in a comprehensive manner Pre-Budget Memoranda of leadingtextileorganizations,whomweprofuselythank fortheirco-operationandsupport. A host of textile industry organisations have pleaded for reduction in excise duty on man-made fibres to 6% from 12%. To bring about revenue neutrality, on reducing excise duty on man-made fibres to 6%, some organisation have recommended a mandatory duty of 2% on fibre forward chain including cotton yarn, cotton fabrics,etcalongwithman-madefibretextiles. Really speaking, there is no justification for imposing higher excise duty on MMF and MMF textiles, particularly when it is a tenet of the principles of taxation that the government should not promote or discourage consumption of same or similar products. st However, once the GST is introduced from 1 April, 2016, there will be the same rate of duty on Cotton and MMFstreamsofproduction. Like all segments of the industry, Textile Machinery Manufacturers are also keen to guard their turf. One recommendation of theirs is to restrict the benefit of zero duty to super-high-speed shuttleless looms. This may be found irksome by the textile industry. The textile industry looks forward to zero customs-duty regime for all Textile Machinery other than ring frames. If the textile industry is to emerge as the winner in the international race for textiles and garments, it must be encouraged to install state-of-the-art machinery and forthispurpose,zerodutywindowmustbeopened. Toencouragethetextilemanufacturerstodiversityinto themanufactureofweavingandprocessingmachinery, government could consider other avenues, like soft loans, liberal TUFS support, assured supply of power at concessionalrateetc . With the encouragement, support and appreciation received from our subscribers, advertisers, well- wishers and authors of articles, we are glad to announce that with effect from January 2015, our magazine will be published every month, instead of quarterlyas atpresent. We are planning to introduce several new features in the monthly format for the benefit of our readers, and look forward to receiving the support of all of you with greaterzeal. What the organisations of the industry look out for the forthcoming Budget? '' There are many paths to the top of the mountain, but the view is always the same'' TVC Monthly Issue From Now ... !

6. TEXTILE VALUE CHAIN | Jan 20154 www.textilevaluechain.com JANUARY 2015 ISSUE In this Issue... EDITORIAL TEAM Graphic Designer Mr. Anant A. Jogale Advertising & Sales Md. Tanweer Editorial Advisor Shri V.Y. Tamhane INDUSTRY Mr. Devchand Chheda City Editor - Vyapar ( Janmabhumi Group) Mr. Manohar Samuel Joint President, Birla Cellulose, Grasim Industries Dr. M. K. Talukdar VP, Kusumgar Corporates Mr. Shailendra Pandey VP (Head – Sales and Marketing),Indian Rayon Mr. Ajay Sharma Ms. Jigna Shah GM- RSWM ( LNJ Bhilwara Group) Editor & Publisher EDUCATION / RESEARCH Mr. B.V. Doctor HOD knitting, SASMIRA , Dr. Ela Dedhia Associate Professor, Nirmala Niketan College Dr. Mangesh D. Teli Professor, Dean ICT Dr. S.K. Chattopadhyay Principal Scientist & Head MPD, CIRCOT Dr. Rajan Nachane Retired Scientist, CIRCOT CONSULTANT / ASSOCIATION Mr. Shivram Krishnan Senior Textile Advisor Mr. G. Benerjee Management & Industrial Consultant Mr. Uttam Jain Director PDEXCIL; VP of Hindustan Chamber of Commerce Mr. Shiv Kanodia Sec General, Bharat Merchant Chamber Mr. N.D. Mhatre Dy. Director, ITAMMA NEWS COVER STORY : PRE BUDGET MEMORANDUM ARTICLES SHOW REPORT MARKET REPORT 9 – Government News 10- Corporate News 11-ISA (Indian Spinners Association) 12- TEXPROCIL ( The Cotton Textile Export Promotion Council) 13- SIMA ( South Indian Mills Association) 15- Faitma (Federation of all India Textile Manufacturers Association) 17- TMMA (Textile Machine Manufacturing Association ) 19-SRTEPC ( The Synthetic & Rayon Textiles Export Promotion Council) 21- New EU GSP Plus scheme of EU & its impact on T&C export of India, by Mr.Raut, Textile Committee 22- HI CAI Heroes of Textile Value Chain, by Shri V.Y. Tamhane 23- Road map to Indian Textile Exports by Mr.AvinashMayekar, Suvin Advisor 30- Challenges and Opportunities facing EU companies in Technical Textiles byMr.Hendrikvandendek,Gherzi 49- Lean Manufacturing – Keeping Textile Sustainable, by Mr. Harish Chatterjee, Raymond Limited. 26- TEMTECH 2014& HEIMTEXTILE INDIA 2015 27- ITMACH INDIA 2014 31-TECHNOTEX 2015 33- TAG – FICCI 2014 Conference 46-GTTES 2015 36-TAI Mumbai 2014 Conference 37- TECHTEXIL Symposium 2014 40-Cotton Report 43- College- NMIMS 44- Fabric Report 47-New Appointment in the industry 48-Show Calendar 52- Domestic Fashion Forecast – Spring Summer 2015 Consulting Editor Mr. Avinash Mayekar

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11. www.textilevaluechain.com TEXTILE VALUE CHAIN | Jan 2015 9 Trade Facilitation Centre The Finance Minister in the Budget 2014-15 announced to set up Trade Fa- cilitation Centre and Crafts Museum with an outlay of Rs.50 crore to develop and promote handloom products and carry forward the rich tradition of handlooms of Varanasi. The State Government has not al- Ž‘––‡† –Š‡ Žƒ†Ȁ„—‹Ž†‹‰ ‹†‡–‹ϐ‹‡† ˆ‘” setting up Trade Facilitation Centre and Crafts Museum at Varanasi. The Finance Minister in the Budget 2014-15 announced to set up six more Textile mega clusters at Bareily, Lucknow, Surat, Kut- tch, Bhagalpur, Mysore and one in Tamil Nadu with an allocation of Rs.200 crore. Varanasi Mega handloom cluster is already under implementation. Š‡ ˆϐ‹…‡ ‘ˆ ‡˜‡Ž‘’‡– ‘Ǧ missioner for Handlooms, Ministry of Textiles is implementing the following schemes for development of handlooms and welfare of handloom weavers:- ȋ‹Ȍ ƒ–‹‘ƒŽ ƒ†Ž‘‘ ‡˜‡Ž‘’‡– Programme (ii) Handloom Weavers’ Comprehen- sive Welfare Scheme (iii) Yarn Supply Scheme and (iv) Comprehensive Handloom Cluster ‡˜‡Ž‘’‡– …Š‡‡Ǥ Under the Comprehensive Handi- …”ƒˆ–• Ž—•–‡” ‡˜‡Ž‘’‡– …Š‡‡ ȋ Ǧ Ȍǡ –™‘ ‡‰ƒ …Ž—•–‡”• ‹Ǥ‡Ǥ ‹”œƒ’—” – Bhadohi (UP) and Srinagar (JK) are implemented for the development of Carpet Industry in the State. Promotion of Chanderi Tex- tile Industry The Government of India has been implementing following schemes in all over India to promote handloom textile industry including Chanderi – ȋ‹Ȍ ƒ–‹‘ƒŽ ƒ†Ž‘‘ ‡˜‡Ž‘’‡– Programme – two components: Ȉ ‡˜‹˜ƒŽǡ ‡ˆ‘” ƒ† ‡•–”—…–—”‹‰ (RRR) Package for handloom sector Ȉ ‘’”‡Š‡•‹˜‡ ƒ†Ž‘‘ ‡˜‡Ž‘’Ǧ ment Scheme Ȉ

12. –‡‰”ƒ–‡† ƒ†Ž‘‘ Ž—•–‡” ‡˜‡ŽǦ ‘’‡– …Š‡‡ȋ

13. Ȍ (ii) Handloom Weavers Compre- hensive Welfare Scheme – two components: Ȉ ‡ƒŽ–Š

14. •—”ƒ…‡ …Š‡‡ ˆ‘” ƒ……‡•• to health care facilities Ȉ ƒŠƒ–ƒ ƒ†Š‹ —ƒ” ‹ƒ ‘Ǧ jana for life insurance (iii) Yarn Supply Scheme Under Integrated Handloom Cluster ‡˜‡Ž‘’‡– …Š‡‡ȋ

15. Ȍǡ ‹ ŠƒǦ deri, handloom cluster for its integrated holistic development was sanctioned. The cluster covered about 5000 handlooms and was developed with Central share of Rs.2.00 crore. Chanderi handloom cluster was implemented by Entre- ’”‡‡—”•Š‹’ ‡˜‡Ž‘’‡–

16. •–‹–—–‡ ‘ˆ

17. †‹ƒ ȋ

18. Ȍǡ Š‡†ƒ„ƒ†Ǥ

19. –Š‡ …Ž—•–‡” various interventions like upgradation of existing dye house, setting up com- mon facility centre, design project development, engagement of designer, exhibitions buyer seller meets, forma- tion of web portal, skill development technology up-gradation etc. were implemented. ƒ–‹‘ƒŽ ƒ†Ž‘‘ ‡˜‡Ž‘’‡– ’”‘‰”ƒ‡ ȋ Ȍ ™ƒ• ‹–”‘†—…‡† ‹ 2013-14, having various components, ‹…Ž—†‹‰ …‘•‘Ž‹†ƒ–‹‘ ‘ˆ …Ž—•–‡”•Ǥ —”Ǧ ‹‰ ʹͲͳ͵ǦͳͶǡ

20. ǡ Š‡†ƒ„ƒ† Šƒ• „‡‡ sanctioned consolidation of the Chand- ‡”‹ Šƒ†Ž‘‘ …Ž—•–‡” —†‡” Ǥ UnderHandicrafts,BabaSahebHast- •Š‹Ž’ ‹ƒ• ‘Œƒƒ ȋ Ȍ •…Š‡‡• „‡Ǧ ‹‰ ‹’Ž‡‡–‡† „› –Š‡ ˆϐ‹…‡ ‘ˆ –Š‡ ‡Ǧ velopment Commissioner (Handicrafts) sanctioned in favour of Bird Charitable Trust, Guna. Under this scheme, 436 ƒ”–‹•ƒ• Šƒ˜‡ „‡‡ „‡‡ϐ‹––‡† –Š”‘—‰Š programmes such as skill upgradation training design technical development and by way of distribution of tool kits. Three Guru Shishya Parampara Train- ing Scheme have also been organised –Š”‘—‰Š ƒ–‹‘ƒŽ ™ƒ”†‡‡ ƒ•–‡” craftsman Shri Tulsi Ram Koli at Chand- eri. Similarly, these artisans are also being provided with marketing assistance –Š”‘—‰Š ƒ†Š‹ Š‹Ž’ ƒœƒ”•ǡ ”ƒˆ– ƒœƒ”ǡ Exhibitions and National Level Melas etc. being organised on regular basis at dif- ferent locations within the country. Promotion of Muga Silk Muga is wild eco race available only in India inhabitating Brahamputra val- Ž‡› …‘˜‡”‹‰ ƒ‹Ž› ••ƒ ƒ† ’ƒ”–• ‘ˆ ‡‰ŠƒŽƒ›ƒ ƒ† ƒ‰ƒŽƒ† „‘”†‡”‹‰ •Ǧ sam. In order to produce better quality silk and increase the yield, 8 best muga silkworm races have been isolated and assessed by the Central Muga Research Institute, Ladoigarh, Jorhat of the Central Silk Board (CSB). Š‡ ƒŒ‘” ’”‘„Ž‡ ‹†‡–‹ϐ‹‡† ‹• Žƒ… of systematic plantation and silkworm seed supply. The Government has taken remedial steps to improve silkworm breed, evolve better host plants along with development of appropriate package of practices through the Central Silk Board (CSB)’s main Research Institute; CMERTI located at Ladoigarh in Jorhat, ••ƒǤ †‡” ‡–”ƒŽŽ› •’‘•‘”‡† ƒ–ƒǦ Ž›–‹… ‡˜‡Ž‘’‡– ”‘‰”ƒ‡ ȋ Ȍ support to farmers are provided for (i) Raising muga food plant nursery (ii) —‰‡–ƒ–‹‘ ƒ† ƒ‹–‡ƒ…‡ ‘ˆ —‰ƒ ˆ‘‘† ’Žƒ–• ™‹–Š •–ƒ”– —’ –‘‘Ž•ǡ ȋ‹‹‹Ȍ •Ǧ sistance for maintenance of existing —‰ƒ ˆ‘‘† ’Žƒ–ƒ–‹‘ ȋ‹˜Ȍ ••‹•–ƒ…‡ –‘ —‰ƒ ƒ†‘’–‡† •‡‡† ”‡ƒ”‡”•ǡ ȋ˜Ȍ •Ǧ sistance to muga private grainures and ȋ˜‹Ȍ ••‹•–ƒ…‡ –‘ ‡š‹•–‹‰ —‰ƒ ’”‹˜ƒ–‡ grainures for up-gradation of seed production capacity as well as assistance for strengthening and up-gradation of their seed infrastructure to the State. Š‡ ‘˜‡”‡– Šƒ• ‹†‡–‹ϐ‹‡† ‡™ ’‘–‡–‹ƒŽ —‰ƒ •‡‡† œ‘‡• ‹ ‡•– ‡Ǧ ‰ƒŽ ȋ ‘‘…Š ‡Šƒ” ‹•–”‹…–ǡ ƒŽ‹’‘‰ǡ ƒ”Œ‡‡Ž‹‰ ‹•–”‹…–Ȍǡ ‹‹ǡ †Š”ƒ Pradesh, Madhya Pradesh, Uttarakhand. Š‡•‡ ‹•‘Žƒ–‡† •‡‡† œ‘‡• Š‡Ž’ –‘ ƒ—‰Ǧ ‡– …‘‡”…‹ƒŽ •‡‡† ’”‘†—…–‹‘ ‹ •Ǧ sam. The Government through Central Silk Board (CSB) has taken the following measures for increasing production of muga silk:- •–ƒ„Ž‹•Š‡† ‡‰‹‘ƒŽ ˆϐ‹…‡ ‘ˆ at Guwahati to coordinate sericulture development activities with State and other ƒ‰‡…‹‡• ‹ ••ƒ ƒ† ‡‰‹‘Ǥ Goverment News News

21. TEXTILE VALUE CHAIN | Jan 201510 www.textilevaluechain.com SAREES MADE WITH DUPONT™ SORO- NA® FIBER: EXCEPTIONAL SOFTNESS, FLUID DRAPE, LIGHT WEIGHT —‘– Šƒ• „‡‡ –Š‡ ™‘”Ž† Ž‡ƒ†Ǧ ‡” ‹ ϐ‹„‡” –‡…Š‘Ž‘‰› •‹…‡ –Š‡ ‡ƒ”Ž› ͳͻͲͲǯ•Ǥ ”‘ –Š‡ ‰”‘—†Ǧ„”‡ƒ‹‰ ϐ‹„‡”• Ž‹‡ –Š‡ ˜‡”•ƒ–‹Ž‡ ›Ž‘ǡ ƒ…”‘̺ ’‘Ž›Ǧ ester, neoprene rubber fabric, elastic Ly- …”ƒ̺ǡ „—ŽŽ‡–Ǧ’”‘‘ˆ ‡˜Žƒ”̺ǡ ƒ† ‡ϐŽ‘̺ǡ —‘– Šƒ• …”‡ƒ–‡† ‡š–”ƒ‘”†‹ƒ”› textile products that have transformed contemporary living. —‘– ‹• Žƒ—…Š‹‰ ‹–• ‰”‘—† „”‡ƒ‹‰ǡ ‹‘˜ƒ–‹˜‡ ‘”‘ƒ̺ ϐ‹„‡” –‘ the Indian textile market in Sarees at a ’”‹˜ƒ–‡ ˆƒ•Š‹‘ •Š‘™ ‹ ‡ŽŠ‹ ‘ ‡…‡Ǧ ber 19, 2014 with a Bollywood celeb- rity as the showstopper. This event will showcase a collection by Vipul Sarees, ™‡ŽŽ ”‡…‘‰‹œ‡† ‹‘˜ƒ–‹˜‡ Ž‡ƒ†‡” ‹ –Š‡ Saree segment. This collection, made ex- …Ž—•‹˜‡Ž› ™‹–Š ‘”‘ƒ̺ ϐ‹„‡”ǡ Š‹‰ŠŽ‹‰Š–• high quality, soft and colorful sarees in Chiffon, Georgette, Satin and Crepe cat- egories. ‘”‘ƒ̺ …‘–ƒ‹• ͵͹Ψ ƒ—ƒŽŽ› renewable plant based ingredients by ™‡‹‰Š– ȋʹͺΨ „‹‘„ƒ•‡† …ƒ”„‘Ȍ ǲ • •‘‡‘‡ ™Š‘ ϐ‹”•– „”‘—‰Š– ‘Ž›Ǧ ‡•–‡” ‹–‘ —”ƒ– ‹ ͳͻ͹Ͷ ˆ‘” —•‡ ‹ ƒ†‹‡• Ethnic wear, I have seen several innova- tions come to Surat in the last 40 years ƒ† ‹– ‹• › „‡Ž‹‡ˆ –Šƒ– ‘”‘ƒ̺ ™‹ŽŽ „‡ ƒ ”‡˜‘Ž—–‹‘ƒ”› ‡™ ϐ‹„‡” –Šƒ– ™‹ŽŽ …Šƒ‰‡ –Š‡ ‰ƒ‡ ‹ –Š‡ —”ƒ–

22. †—•–”›Ǥ • –Š‡ ϐ‹”•– ƒ†‘’–‡” ‘ˆ ‘”‘ƒ̺ ‹ —”ƒ– ƒ”Ǧ ‡–ǡ ‡ Šƒ˜‡ †‡•‹‰‡† –Š‡ ‘”‘ƒ̺ ˆƒ„Ǧ rics to leverage its natural softness and its ability to be processed in gentler con- †‹–‹‘•Ǥ ‡ ƒ”‡ …‘ϐ‹†‡– –Šƒ– –Š‡ Žƒ†‹‡• will be thrilled with this exclusive VIPUL ‘”‘ƒ̺ …‘ŽŽ‡…–‹‘Ǥǳ ƒ‹† „› ”Ǥ ‹Ž ‰ƒ”™ƒŽǡ ǡ ‹’—Ž ƒ•Š‹‘• COTTON USA at Heimtex- til 2015: Purity, Quality and Responsibility †‡„—–• ƒ ‡™ ‰Ž‘„ƒŽ campaign at the Heimtextil trade show- ˆ”‘ ƒǤ ͳͶǦͳ͹ǡ ʹͲͳͷ ‹ ƒŽŽ ͺǤͲȀ ͸Ͳ ƒ– the Frankfurt Exhibition Center in Frank- furt, Germany. Heimtextil will mark the •–ƒ”– ‘ˆ –Š‡ ϐ‹”•– ‰Ž‘„ƒŽ ƒ†˜‡”–‹•‹‰ …ƒǦ ’ƒ‹‰ ˆ‘” –Š‡ ‡™ Ž‘‰‘ǡ ƒ global brand for quality U.S. cotton prod- —…–•ǤŠ‡ ’ƒ˜‹Ž‹‘™‹ŽŽ ƒŽ•‘ serve as an international meeting point for the entire cotton trade at Heimtextil 2015. Š‡ ‡™ ‰Ž‘„ƒŽ …ƒǦ ’ƒ‹‰’”‘‘–‡• ƒ ”‡˜‹–ƒŽ‹œ‡† „”ƒ† ˜‹•‹‘ ‡’Šƒ•‹œ‹‰ ǤǤ …‘––‘ǯ• ’—”‹–›ǡ “—ƒŽ‹–› and responsibility: a natural ingredient ˆ‘” –‘†ƒ›ǯ• Š‘‡ –‡š–‹Ž‡• „‘” ‹ –Š‡ ˆ”‘ •‡‡†ǡ •— ƒ† •‘‹ŽǤ – –Š‡ „‘‘–Šǡ ‘––‘ ‘—…‹Ž

23. –‡”ƒ–‹‘ƒŽ (CCI), Cotton Incorporated and Supima will provide information about the global cotton market and sourcing, as well as about the marketing and promotional services that the U.S. cotton industry offers. ‡•’‘•‹„Ž‡ǡ–”ƒ•’ƒ”‡–ϐ‹„‡”•‘—”…Ǧ ‹‰ ‹• ƒ ‹–‡‰”ƒŽ ’ƒ”– ‘ˆ –Š‡ marketing and licensing program, which operates globally and offers a wide range of services. CCI’s Sourcing Programsup- ’‘”–• „—›‡”• ‹ •‘—”…‹‰ ǡ from raw material to the end product, with a focus on responsible cotton production and sourcing through participa- –‹‘ ‹ –Š‡ ‘––‘ ̻ ’”‘‰”ƒǤ In addition to the international COT- Ž‹…‡•‹‰ ’”‘‰”ƒ ƒ†

24. ǯ• Sourcing Program, the U.S. cotton industry provides a portfolio of other key services including the Supima licensing programandtrend forecasts and technical support from Cotton Incorporated.Li- …‡•‡‡• ƒŽ•‘ „‡‡ϐ‹– ˆ”‘ –Š‡ ˜ƒŽ—ƒ„Ž‡ ‹Ǧ sight they obtain into consumers, based ‘ –Š‡ ϐ‹†‹‰• ‘ˆ ‹–‡”ƒ–‹‘ƒŽ •—”˜‡›• made available to all global partners. – ‡‹–‡š–‹Žǡ

25. ™‹ŽŽ ’”‡•‡– ’”‘†Ǧ uct samples from the new collections ‘ˆ ‹–‡”ƒ–‹‘ƒŽ Ž‹…‡•‡‡• such as Bassetti (Italy), Caliphil (Tai- ™ƒȌǡ ƒ‹ŽŽƒ–‡š ȋ

26. –ƒŽ›Ȍǡ ‘—„Ž‡ –ƒ” (Thailand), Graser Exklusive Bettwäsche (Germany), Jaspal Home (Thailand), Ka- ltex Home (Mexico), Kimpeks (Turkey), ‹œ–‡š ȋ —ƒ–‡ŽƒŽƒȌǡ ƒ‰ƒ•‹ ȋ™‡†‡Ȍǡ ‹•Š‹ƒ™ƒ ƒ‰›‘ ȋ ƒ’ƒȌǡ Š‹Œ‹ƒœŠ—ƒ‰ Changshan(China), Zermatex (Mexico) andZucchi Group (Italy). The need for green growth:ATE One of the biggest problems India is facing today is the availability of clean ™ƒ–‡”Ǥ ”‡…‡– •–—†› ‹†‹…ƒ–‡• –Šƒ– „› 2030 the water supply in India will be ŠƒŽˆ ‘ˆ ‹–• †‡ƒ† Ȃ ‡‘—‰Š –‘ •‹‰‹ϐ‹Ǧ cantly hamper the social economic †‡˜‡Ž‘’‡– ‘ˆ –Š‡ …‘—–”›Ǥ – –Š‡ •ƒ‡ time, the rapid expansion of cities and industries has rapidly raised the amount ‘ˆ ™ƒ•–‡™ƒ–‡”Ǥ †‡“—ƒ–‡ ™ƒ•–‡™ƒ–‡” †‹•Ǧ posal and sanitation facilities have thus become very crucial. India’s water situation, primarily †‡’‡†‹‰ ‘ ϐ‹…Ž‡ ”ƒ‹ˆƒŽŽ ™‹–Š —…Š variability, is quite serious. Our aquifers ƒ”‡ ‘•–Ž› ‹ ’‘‘” …‘†‹–‹‘ǡ ™‹–Š †‡ϐ‹Ǧ cient safeguards to prevent “water min- ‹‰ǳ ƒ† ‰”‘™‹‰ …‘–ƒ‹ƒ–‹‘ †—‡ –‘ industrial pollution and human runoff. Our growing population and climate change have started to exert pressure on our water supplies. We know that water is critical to life, but there is increasing evidence that water qualityis even more important than we imagined. The effects of polluted water cannot be overempha- •‹œ‡†Ǥ

27. – ‹• ƒ ‘™ ˆƒ…– –Šƒ– …Š‡‹…ƒŽ• in water can affect our hormonal system and cause cancer. Unclean water leads to an increase in many infectious diseases. † ”‡…‡– •–—†‹‡• •–”‘‰Ž› •—‰‰‡•– –Šƒ– faecal contamination of water is leading to malnutrition in children who are drinking such water, even where they are consuming enough nutritious food. – ǤǤ Ǥǡ ‘—” ‡ˆˆ‘”–• ƒ”‡ ˆ‘…—•‡† ‘ developing world-class solutions for many aspects of our water problems. We have many smoothly running instal- lations that showcase green technology –Šƒ– •ƒ˜‡• ‘‡›Ǥ ‘” ‡šƒ’Ž‡ǡ ‘—” process generates gas, saves energy, reduces chemical consumption and greatly reduces sludge. Our screening grit and sludge management solutions from Hu- ber enable sewage treatment plants to work optimally andensure clean and safe working conditions for workers at these plants. Corporate News News

28. www.textilevaluechain.com TEXTILE VALUE CHAIN | Jan 2015 11 PRE BUDGET MEMORANDUM

29. –Š‡ …‘”’‘”ƒ–‡ ™‘”Ž†ǡ –Š‡ ™‹–‡” ‘–Š• ‘ˆ ‘˜‡„‡” ƒ† ‡…‡„‡” ƒ”‡ ‡ƒ– ˆ‘” ’”‡’ƒ”ƒ–‹‘ ‘ˆ ’”‡Ǧ —†‰‡– ‡‘Ǧ randa in the context of forthcoming Central Budget. Š‡ —†‰‡– ˆ‘” ʹͲͳͷǦͳ͸ Šƒ• ƒ •’‡…‹ƒŽ •‹‰‹ϐ‹…ƒ…‡ ˆ‘” –Š‡ –‡š–‹Ž‡ ‹†—•–”› ‹ ˜‹‡™ ‘ˆ –Š‡ ”‡…‘‡†ƒ–‹‘• ƒ†‡ „› –Š‡ š’‡”– ‘‹––‡‡ …‘•–‹–—–‡† „› –Š‡ ‹‹•–”› ‘ˆ ‡š–‹Ž‡• —†‡” –Š‡ Šƒ‹”ƒ•Š‹’ ‘ˆ Š”‹ Œƒ› Šƒƒ”ǡ ‡„‡”Ǧ‡…”‡–ƒ”›ǡ ƒ–‹‘ƒŽ ƒ—ˆƒ…–—”‹‰ ‘’‡–‹–‹˜‡‡•• ‘—…‹Žǡ ™‹–Š –‘’ ‘˜‡”‡– ˆϐ‹…‡”• ƒ† ƒ’–ƒ‹• ‘ˆ –Š‡ ‹†—•–”› ƒ• ‹–• ‡„‡”•Ǥ The Textile Industry has always a special place of importance in the national economy inasmuch as it is a net earner of ˆ‘”‡‹‰ ‡š…Šƒ‰‡ –‘ –Š‡ ‡š–‡– ‘ˆ ‡ƒ”Ž› ̈́ ͶͲ „‹ŽŽ‹‘ǡ ‡’Ž‘›• ƒ„‘—– ͳͲ …”‘”‡ ’‡”•‘• ƒ† Šƒ• ƒ •‹œ‡ ‘ˆ ̈́ ͳʹͲ „‹ŽŽ‹‘Ǥ Š‡ Expert Committee has envisaged a larger role for the textile industry by 2024-25, when it is targeted to earn foreign exchange –‘ –Š‡ ‡š–‡– ‘ˆ ̈́ ͵ͲͲ „‹ŽŽ‹‘ ƒ† ‡‡– †‘‡•–‹… †‡ƒ† –‘ –Š‡ ‡š–‡– ‘ˆ ̈́ ͵ͷͲ „‹ŽŽ‹‘Ǥ

30. ‘–Š‡” ™‘”†•ǡ –Š‡ •‹œ‡ ‘ˆ –Š‡ industry in the next ten years will be a gigantic US $ 650 billion. This recommendation appears to be the right step in the right †‹”‡…–‹‘ǡ „‡…ƒ—•‡ ‹– ”‡ƒŽ‹œ‡• –Š‡ —–ƒ’’‡† ’‘–‡–‹ƒŽ ‘ˆ –Š‡ –‡š–‹Ž‡ ‹†—•–”›Ǥ The Textile Policy of the Ministry of Textiles is not yet out, but it is expected that the Vision Report of the Expert Commit- –‡‡ ™‹ŽŽ ”‡ϐŽ‡…– ‹ –Š‡ ‡š–‹Ž‡ ‘Ž‹…›Ǥ – –Š‹• •–ƒ‰‡ǡ ‹– ‹• ƒŽ•‘ ‡…‡••ƒ”› –‘ ƒ’’”‡…‹ƒ–‡ –Šƒ– Š‹ƒ ™Š‹…Š Šƒ• ƒ †‘‹ƒ– •Šƒ”‡ ‘ˆ ͵͸ ’‡” …‡– ‹ –Š‡ ‹–‡”ƒ–‹‘ƒŽ market is facing the problem of cost escalation, which is blunting its competitive strength. China is also reported to enter a Š‹‰Š –‡…Š‘Ž‘‰› •‡…–‘” ‹ ƒ „‹‰ ™ƒ›Ǥ ŽŽ –Š‹• ‡š’Žƒ‹• –Š‡ ™ƒ‹‰ ‹–‡”‡•– ‘ˆ Š‹ƒ ‹ –Š‡ –‡š–‹Ž‡• ƒ† ‰ƒ”‡–•Ǥ ƒ‰Žƒ†‡•Š which is a leading exporter of apparels has its own problems. Countries depending on outside sources for yarn or cloth have •‡”‹‘—• Ž‹‹–ƒ–‹‘• ‘ –Š‡‹” …‘’‡–‹–‹˜‡ •–”‡‰–ŠǤ – –Š‡ •ƒ‡ –‹‡ǡ –Š‡ ‡”‹…ƒ ‡…‘‘› ‹• „‡…‘‹‰ •–”‘‰‡”Ǥ Ž–Š‘—‰Š there is not much encouraging news from E.U. countries, there is no need to take a pessimistic view. The ‘Look East’ Policy of our Government is also fetching encouraging response. Š‡ ’”‡Ǧ —†‰‡– ”‡…‘‡†ƒ–‹‘• ƒ†‡ „› Ž‡ƒ†‹‰ ‘”‰ƒ‹œƒ–‹‘• ‘ˆ –Š‡ –‡š–‹Ž‡ ‹†—•–”›ǡ ™Š‹…Š ˆ‘ŽŽ‘™ –Š‹• ‘–‡ǡ —•– get serious consideration of the Hon’ble Finance Minister for enabling the industry to make stupendous contribution to the national economy. 1. Removal of 5% Custom Duty 4% SAD on Man Made Fibres (MMF): There is hardly any import of Man Made Fibre but local ƒ—ˆƒ…–—”‡”• ™Š‘ ‡Œ‘› ‘‘’‘Ž› •–ƒ–—•ǡ ƒ†† ͷΨ —•–‘ —–› ƒ† ͶΨ ™Š‹Ž‡ ϐ‹š‹‰ –Š‡ ’”‹…‡ ˆ‘” •—’’Ž› –‘ †‘‡•–‹… spinners which unnecessarily increases cost for the local spinners and down-stream industry. There is hardly any revenue implication on removal of these duties as imports are negli- ‰‹„Ž‡Ǥ ‘™‡˜‡”ǡ ”‡‘˜ƒŽ ‘ˆ –Š‡•‡ †—–‹‡• ™‹ŽŽ ‰‹˜‡ ϐ‹ŽŽ‹’ –‘ Textile industry, from spinning to garments. ‡‰ƒ”†‹‰ ™‡ ™‘—Ž† Ž‹‡ –‘ ƒ†† ‘‡ ‘”‡ ’‘‹– –Šƒ– ‹• ”‡ˆ—†‡† –‘ –”ƒ†‡”• „—– ‘– –‘ ƒ—ˆƒ…–—”‡”• ƒ† therefore add to their cost. 2. Reduction in Excise Duty on Man Made Fibres (MMF): – ’”‡•‡– –Š‡”‡ ‹• ͳʹΨ ƒ†ƒ–‘”› š…‹•‡ —–› ‘ ƒ• ƒ‰ƒ‹•– Ǯ‹Žǯ †—–› ‘ …‘––‘Ǥ —‡ –‘ –Š‹•ǡ ’”‘†—…–• ƒ†‡ ‘—– of MMF become much costlier compared to cotton. This discrimination is hindering the growth of Man Made Textile In- dustry. • ›‘— ƒ”‡ ƒ™ƒ”‡ǡ ‹”ǡ ‰Ž‘„ƒŽŽ› ƒ……‘—– ˆ‘” ƒ”‘—† ͹ͲΨ ‘ˆ –Š‡ –‘–ƒŽ ϐ‹„”‡ …‘•—’–‹‘ ™Š‡”‡ƒ• ‹

31. †‹ƒ –Š‡‹” COVER STORY INDIAN SPINNERS’ ASSOCIATION •Šƒ”‡ ‹• Ž‡•• –Šƒ ͵ͲΨǤ ‘ …‘””‡…– –Š‹• •‡™‡† ’‘•‹–‹‘ǡ ‹– ‹• necessary to remove the discrimination between MMF and ƒ–—”ƒŽ ϐ‹„”‡•Ǥ Taking into account the revenue needs, we recommend –Šƒ– š…‹•‡ —–› ‘ •Š‘—Ž† „‡ ”‡†—…‡† –‘ ͸Ψ ˆ”‘ ͳʹΨ ƒ– ’”‡•‡– ‹ –Š‡ ϐ‹”•– •–ƒ‰‡Ǥ ‡ Š‘’‡ –Šƒ– ”‡˜‡—‡ Ž‘•• ™‹ŽŽ „‡ made up automatically in next 3-4 years with the growth in consumption of MMF. 3. Optional Excise Duty for all textile products other than MMF: Optional duty regime for excise may kindly be continued until introduction of GST since this has been increasing and felicitating substantial investment and expansion in the textile industry. 4. Removal of Excise Duty on Recycled Polyester Staple Fi- bre: š…‹•‡ —–› ̷ ʹΨ ‹• ƒ’’Ž‹…ƒ„Ž‡ ‘ ”‡…›…Ž‡† Ǥ ƒ”Ž‹‡”ǡ ”‡…›…Ž‡† ™ƒ• ƒŽ™ƒ›• ‡š‡’– ˆ”‘ š…‹•‡ —–› †—‡ –‘ –Š‡ following reasons: ȋƒȌ ‡…›…Ž‡† ϐ‹„”‡ ‹• ƒ—ˆƒ…–—”‡† ˆ”‘ ȋ‘Ž›‡–Š›ŽǦ ene Terephthalate) bottles which have already suf- ˆ‡”‡† –Š‡ „—”†‡ ‘ˆ š…‹•‡ —–›Ǥ

32. ”‡…›…Ž‹‰ ™Šƒ–

33. TEXTILE VALUE CHAIN | Jan 201512 www.textilevaluechain.com INDIRECT TAXATION CUSTOMS DUTY (i) To Reduce Customs duty on Textile Machinery( other than ring frames) to Zero (ii) Customs duty on parts components of textile ƒ…Š‹‡”› •Š‘—Ž† „‡ ‹Ž ‘” …‘‡…–‹‘ƒŽ ”ƒ–‡ ƒ– ͸Ψ ȋ‹‹‹Ȍ ‹–Š†”ƒ™ —•–‘• —–› ‘ ‹’‘”– ‘ˆ —”ƒ…‡ ‹Ž used for generating power for captive consumption by Textile Units. (iv) To Exempt imports of Textile Machinery from –Š‡ Ž‡˜› ‘ˆ ͶΨ ††‹–‹‘ƒŽ —–› ‘ˆ —•–‘• ȋ’‡…‹ƒŽ Ȍ ȋ˜Ȍ ‘ ‡š‡’– ’‡…‹ƒŽ ††‹–‹‘ƒŽ —–› ȋ Ȍ ‘ ‰‘‘†• ‡š‡’–‡† ˆ”‘ ȋ˜‹Ȍ ‡ˆ—† ‘ˆ –‘ ƒ—ˆƒ…–—”‡”• ȋ˜‹‹Ȍ ƒ–‡ ‘ˆ •Š‘—Ž† „‡ ”‡†—…‡ –‘ ʹΨ EXCISE DUTY (i) Optional duty for Cotton textiles (ii) To exempt shuttleless looms from Excise duty ȋ‹‹‹Ȍ ‘ „‘Ž‹•Š š…‹•‡ —–› ‘ ‡š–‹Ž‡ ƒ…Š‹‡”›ǡ Spares Components. ȋ‹˜Ȍ ‘ ƒ„‘Ž‹•Š š…‹•‡ —–› ‘ —”ƒ…‡ ‹Ž ȋ Ȍ (v) To extend optional duty to EOUs (vi) Technical textiles : exemption may be extended to „•‘”„‡– ‘––‘ǡ ƒ†ƒ‰‡• ‡–… —•‡† ƒ• †”‡••‹‰ material for wound and incisions . SERVICE TAX (i) Reduction in Rate and exemption limit of Service ƒšǡ •Š‘—Ž† „‡ „”‘—‰Š– †‘™ –‘ ͳͲΨ (ii) Exemption of SEZ units from payment of Service Tax (iii) Credit of Service Tax on maintenance repair charges THE COTTON TEXTILES EXPORT PROMOTION COUNCIL happens is that the shape of polymer is changed from „‘––Ž‡ •…”ƒ’ –‘ •–ƒ’Ž‡ ϐ‹„”‡Ǥ Š‹• †‘‡• ‘– –ƒ–ƒ‘—– to manufacture. (b) Recycling of PET bottles is environment-friendly. It ‡‡†• –‘ „‡ ƒ’’”‡…‹ƒ–‡† –Šƒ– ’Žƒ•–‹… ™ƒ•–‡ ‹• Šƒœƒ”†Ǧ ous, both for human beings and cattle. Hence, recycling should be promoted. ȋ…Ȍ ‡…›…Ž‡† ϐ‹„”‡ ‹• —…Š ‹ˆ‡”‹‘” –‘ ˜‹”‰‹ ϐ‹„”‡Ǥ ‡…‡ ”‡…›…Ž‡† ϐ‹„”‡ ‹• —•‡† ˆ‘” …Š‡ƒ’‡” ‡†Ǧ—•‡•ǡ •—…Š ƒ• manufacture of packaging cloth for cement and fertil- ‹œ‡”ǡ ƒ† ƒ• •‡™‹‰ –Š”‡ƒ† ˆ‘” •–‹–…Š‹‰ ‘ˆ •—…Š „ƒ‰•Ǥ In view of the above, we request you to kindly restore the exemption of recycled Polyester Staple Fibre. 5. Textile Machinery, Parts Components: Š‡ ‘”ƒŽ ”ƒ–‡ ‘ˆ †—–› ‹• ͳͲΨǤ ‘™‡˜‡”ǡ ƒ …‘…‡••‹‘ƒŽ ”ƒ–‡ ‘ˆ ͸Ψ ‹• …Šƒ”‰‡† ‘ –Š‡ ‹–‡• ‘ˆ ƒ…Š‹‡”› Ž‹•–‡† ‹ ‹•– ‘Ǥͷ ƒ‡š‡† –‘ ‘–‹ϐ‹…ƒ–‹‘ ‘ǤͳʹȀʹͲͳʹǦ †ƒ–‡† ͳ͹Ǥ͵ǤʹͲͳʹǡ as amended from time to time. The textile industry has been upgrading its manufacturing technology to rise to the international levels, under the scheme of Technology Upgradation of Central Government. Our recommendation is all textile machinery and parts and accessories thereof covered by heading Nos. 8443, 8444, 8445, ͺͶͶ͸ǡ ͺͶͶ͹ǡ ͺͶͶͺ ƒ† ͺͶͷͳ „‡ •—„Œ‡…–‡† –‘ …‘…‡••‹‘ƒŽ †—–› ‘ˆ ͸Ψ ™Š‹…Š ƒ”‡ ‹•–ƒŽŽ‡† ‹ –‡š–‹Ž‡ ‹ŽŽ• „› ˆ‘ŽŽ‘™‹‰ –Š‡ ƒ’Ǧ propriate procedure. (iv) Exemption Service tax on services rendered abroad DIRECT TAXATION Ȉ

34. Ȁ ȋ‹Ȍ ‡’”‡…‹ƒ–‹‘‘ ”‡•–‘”‡ ƒ……‡Ž‡”ƒ–‡† †‡’”‡…‹ƒ–‹‘ ˆ‘” ™‹†‹ŽŽ• ̷ ͺͲΨ —†‡” –Š‡

35. …‘‡ ƒš …–Ǥ Š‹• „‡‡ϐ‹– Šƒ• „‡‡ ‘™ ”‡†—…‡† –‘ ͳͷΨǤ ȋ‹‹Ȍ š‡’–‡† ˆ”‘ ƒ†ƒ–‘”› ‘•– —†‹– ˆ‘” textile mills ȋ‹‹‹Ȍ ’’Ž‹…ƒ„‹Ž‹–› ‘ˆ ȋ ‹‹— Ž–‡”ƒ–‹˜‡ ƒš Ȍ € •Š‘—Ž† „‡ ‡š‡’–‡† ˆ‘”

36. ˆ”ƒ•–”—…–—”‡ •‡…–‘” †—”‹‰ –Š‡ ‡š‡’–‹‘ ’‡”‹‘† ƒ• Ž‘™‡† —†‡” ‡…–‹‘ ͺͲ

37. ‘ˆ –Š‡

38. …‘‡ ƒš …–Ǥ € ‰‰”‡‰ƒ–‡ ‘ˆ ‘‘ Ž‘•• ƒ† —ƒ„•‘”„‡† ‡’”‡…‹ƒǦ tion should be allowed as deduction while computing Book ”‘ϐ‹–• —†‡” •‡…–‹‘ ͳͳͷ Ǥ € ŽŽ ‡š‡’– ‹…‘‡• ‹…Ž—†‹‰ ‘‰Ǧ–‡” ƒ’‹–ƒŽ Gains arising on Sale of Investments ( as exempted under section 10(38) should be excluded while computing Book ”‘ϐ‹–• —†‡” •‡…–‹‘ ͳͳͷ Ǥ (iv) Investment allowance to Manufacturing ‘’ƒ› —†‡” ‡…–‹‘ ͵ʹ (v) Re-assessment / Reopening of Income Tax cases ȋ˜‹Ȍ ‘’ƒ‹‡• …– Small companies with less than Rs. 5 Crores capital should „‡ ‡š‡’–‡† ˆ”‘ ‘’ƒ‹‡• …–Ǥ ‡ƒŽ–‹‡• —†‡” ‘’ƒ‹‡• …– •Š‘—Ž† „‡ ”‡†—…‡† ™Š‹…Š Šƒ• „‡‡ ϐ‹š‡† ƒ”„‹–”ƒ”‹Ž› Ǥ TUFS SCHEME It is suggested that the TUFS should be extended during –Š‡ „Žƒ…‘—– ’‡”‹‘† ˆ”‘ ʹͻǤ͸ǤʹͲͳͲ –‘ ʹ͹ǤͶǤʹͲͳͳ ™Š‡ –Š‡ scheme was suspended . This period may be considered in the old format . It is further proposed to allocate additional COVER STORY

39. www.textilevaluechain.com TEXTILE VALUE CHAIN | Jan 2015 13 fund of Rs.3000 crores for clearing all pending cases of TUF Scheme including the cases of black out period in addition to the scheduled liabilities for regular TUF scheme. BANKING FINANCE (i) To Reduce the rate of interest on Rupee Export Credit –‘ ͹Ψ ȋ‹‹Ȍ ‘ š–‡†

40. –‡”‡•– ƒ–‡ —„˜‡–‹‘ ‘ˆ ͵Ψ –‘ ‘––‘ ‡š–‹Ž‡•

41. – ‹• •—‰‰‡•–‡† –Šƒ– –Š‡ „‡‡ϐ‹– ‘ˆ –Š‡

42. –‡”‡•– Rate Subvention should be extended to the entire Cot- ton textiles sector . if for some reason or due to budget constraints , if the scheme cannot be extended to the entire cotton textiles sector than atleast it should be extended to Madeups ( Home textiles ) However, if the entire chapter 63 cannot be included then it is proposed to include HS Code 6304 under the Scheme . Further, if the product cannot be included at the 4-digit level then it is proposed to include the following items under the scheme : ITC (HS)

43. ȋȌ ‡•…”‹’–‹‘ 63041910 Bed Sheets and Bed Covers of Cotton 63049220 Napkins of cotton not knitted or crocheted 63049230 Pillowcase Slip of Cotton not knitted or crocheted 63049240 Table Cloth cover of cotton not knitted or crocheted 63049260 Towel other than terry of cotton not knitted or crocheted We would request you to kindly take it up with the Minis- try of Finance and RBI so that the above HS Codes gets cov- ‡”‡† —†‡” –Š‡ ͵Ψ

44. –‡”‡•– ƒ–‡ —„˜‡–‹‘ …Š‡‡ Ǥ (iii) To reduce Margin Money for Working Capital ƒ• ƒ”‡ …—””‡–Ž› …Šƒ”‰‹‰ ʹͷΨ ƒ”‰‹ ‘‡› ˆ‘” funding raw-materials purchases for three months .It is suggested that the period of stock limit be increased to 9 months ™‹–Š ”‡†—…‡† ƒ”‰‹ ‘‡› ‘ˆ ͳͲΨ POWER SECTOR Considering the acute power shortage prevailing in the Country especially in Tamil Nadu the following support may be provided to the textile sector : € ‘ ”‘˜‹†‡ ʹͷΨ ƒ’‹–ƒŽ —„•‹†› ˆ‘” …ƒ’–‹˜‡ ’‘™‡” plant including wind mill. € To Permit usage of super kerosene oil for power generation and exempt the same from all central levies . Ȁ

45. Refund State/Local un-rebated levies/taxes/duties to exporters In order to make export products more competitive, –Š‡•‡ Ž‡˜‹‡• •Š‘—Ž† „‡ ‡—–”ƒŽ‹œ‡† –‘ ‡š’‘”–‡”• –Š”‘—‰Š –Š‡ —–› ”ƒ™„ƒ… ‘” ƒ› ‘–Š‡” …Š‡‡ •‘ –Šƒ– –Š‡ ǲ ‘—–”› ‡šǦ ’‘”–• ‹–• ’”‘†—…–• „—– ‘– –ƒš‡•ǳǤ Excise and Customs duties are currently refunded through –Š‡ —–› ”ƒ™„ƒ… …Š‡‡ Ǥ —– –Š‡ †—–‹‡• Ȁ–ƒš‡• …Šƒ”‰‡† „› the State Governments and local bodies including CST are not refunded to the exporters . provision should be made for refund of all duties /taxes levied by the State Governments and ‘…ƒŽ „‘†‹‡• •—…Š ƒ• ǡ ǡ –”› –ƒš ǡ ƒ†‹ –ƒš ǡ Ž‡…–”‹…‹–› †—–› ǡ ˜ƒ”‹‘—• –›’‡• ‘ˆ …‡•• ‡–… ™Š‹…Š ƒ”‡ ƒ”‘—† ͸Ψ ‘ˆ –Š‡ ˆ‘„ value of textiles . If for some reasons, refunds are not possible ǡ†—–› …”‡†‹– •…”‹’• ƒ› „‡ ‹–”‘†—…‡† ̷ ͸Ψ ‘ˆ –Š‡ ˆ‘„ ˜ƒŽ—‡ ‘ˆ exports which can be made transferable and used for payment of duties on imports of any item freely importable. OTHER ISSUES ȋ‹Ȍ —–› ˆ”‡‡

46. ’‘”– ‘ˆ –”‹‹‰• Ƭ ‡„‡ŽŽ‹•Š‡–• ƒ† ‘–Š‡” •’‡…‹ϐ‹‡† ‹–‡• ƒ‰ƒ‹•– ‡š’‘”–• ‘ˆ ‘––‘ ƒ†‡Ǧ ups. (ii) To abolish Hank Yarn obligation (iii) Working Capital Raw-material Textiles mills may be provided with working capital as- •‹•–ƒ…‡ ˆ‘” ’—”…Šƒ•‡ ‘ˆ ”ƒ™ ‘––‘ ƒ– ͹Ψ ‹–‡”‡•– ”ƒ–‡ ǡ ͳͲΨ margin money and 9 months credit period to create a level ’Žƒ›‹‰ ϐ‹‡Ž† ƒ† ‡ƒ„Ž‡ –Š‡ ‹†—•–”› –‘ ’ƒ› ‹–‡”ƒ–‹‘ƒŽ ’”‹…‡ to the farmers. SIMA- SOUTH INDIA MILLS ASSOCIATION I) Central Excise Cotton Cotton textiles € Continue optional excise duties for all textiles and clothing products till GST is implemented € š‡’– •Š—––Ž‡Ž‡•• Ž‘‘• ˆ”‘ ͸Ψ …‡–”ƒŽ ‡š…‹•‡ duty considering the importance given for the power loom sector under TUFS and SITP in the 12th Five Year plan. ƒǦƒ†‡ Ƥ„”‡

47. ‘”†‡” –‘ ƒ…Š‹‡˜‡ –Š‡ –‘–ƒŽ ‘‡•–‹… ƒ† ‡š–‹Ž‡• š’‘”– ƒ”‰‡– ‘ˆ ͸ͷͲ ‹ŽŽ‘ „› ʹͲʹͶǦʹͷ ƒ• ’‡” ‹•‹‘ –”ƒ–‡‰› ’”‡’ƒ”‡† „› –Š‡ ‹‹•–”› ‘ˆ ‡š–‹Ž‡•ǡ ƒ Ž‡˜‡Ž ’Žƒ›‹‰ ϐ‹‡Ž† Šƒ• to be provided to Man-Made Fibre (MMF) in terms of taxation and policy support. By this way, the production and consumption scenario will gradually change towards the global pattern ˆƒ…‹Ž‹–ƒ–‹‰ –Š‡ ”‡ƒŽ‹œƒ–‹‘ ‘ˆ –Š‡ ˜ƒ•– —–ƒ’’‡† ’‘–‡–‹ƒŽ ‹ MMF based textile products for export markets as well as domestic market. COVER STORY THE COTTON TEXTILES EXPORT PROMOTION COUNCIL

48. TEXTILE VALUE CHAIN | Jan 201514 www.textilevaluechain.com III) Service Tax € The credit of service tax paid on erection and com- missioning charges for wind mill as well as on the repairs and maintenance charges may be permitted to be availed. Service Tax on Man power Services:- € Under the existing provision of the service tax act under reverse charge mechanism, service tax on man power services payment is payable by service receiver if service provider is not corporate. The service provider has to pay ˆ‘” ʹͷΨ ‘ˆ –Š‡ ˜ƒŽ—‡ ‘ˆ –Š‡ •‡”˜‹…‡• ƒ† •‡”˜‹…‡ ”‡…‡‹˜‡” ͹ͷΨǤ • ‘™ǡ –Š‡”‡ ‹• ‘ ƒ„ƒ–‡‡– ’”‘˜‹†‡† ‹ ƒ ’‘™‡” •‡”˜‹…‡•Ǥ „ƒ–‡‡– ‹ Ž‹‡ ™‹–Š –Šƒ– ’”‘˜‹†‡† ˆ‘” ‰‘‘†• transport services may be considered. IV) Central Sales Tax € ‡†—…–‹‘ ‘ˆ –‘ ͳΨ V) Cotton Price Stabilization Scheme € Consequent to the removal of cotton from Essen- –‹ƒŽ ‘‘†‹–‹‡• …– ˆ”‘ ‡„”—ƒ”› ʹͲͲ͹ǡ –Š‡ —Ž–‹ƒ–‹‘ƒŽ …‘––‘ –”ƒ†‡”• ϐŽ‘‘†‡† ™‹–Š …Š‡ƒ’ ˆ—†• ƒ† Š‡†‰‹‰ ˆƒ…‹Ž‹Ǧ ties cover major volume of cotton and speculate the prices. This affects both the farmers and the industry and also often the Cotton Corporation of India. In order to alleviate this ’”‘„Ž‡ǡ ‘––‘ ”‹…‡ –ƒ„‹Ž‹œƒ–‹‘ —† …Š‡‡ …‘•‹•–Ǧ ‹‰ ‘ˆ Ž‘ƒ ƒ– ͹Ψ ‹–‡”‡•– ”ƒ–‡ǡ ”‡†—…–‹‘ ‘ˆ ƒ”‰‹ ‘‡› ˆ”‘ ʹͷΨ –‘ ͳͲΨ ƒ† ‹…”‡ƒ•‹‰ –Š‡ …”‡†‹– Ž‹‹– ˆ”‘ –Š”‡‡ months to nine months may be recommended. This would ‡•—”‡ ƒ– Ž‡ƒ•– ʹΨ –‘ ͵Ψ ƒ††‹–‹‘ƒŽ ‰”‘™–Š ‹ –Š‡ ‹†—•–”› fetching substantial revenue and employment generation apart from stability in the prices of cotton, yarn, fabrics, ‡–…Ǥǡ ‰”‡ƒ–Ž› „‡‡ϐ‹––‹‰ ƒŽŽ –Š‡ •–ƒ‡Š‘Ž†‡”• ƒ…”‘•• –Š‡ ˜ƒŽ—‡ chain. VI) TUF Scheme Ȉ ŽŽ‘…ƒ–‡ƒƒ††‹–‹‘ƒŽˆ—†‘ˆ•Ǥ͵ͲͲͲ…”‘”‡•ˆ‘”…Ž‡ƒ”Ǧ ing all pending cases of TUFS including the cases of blackout period in addition to the scheduled liabilities of regular TUFS. VII) Income Tax Ȉ • ’‡” –Š‡ ’”‘˜‹•‹‘• ‘ˆ –Š‡

49. …‘‡ ƒš …–ǡ ™‡ ƒ”‡ required to show the income on accrual basis irrespective of whether the same is received or not. Whereas such income receivable from Government (like power subsidy other incen- tives) is sin die, even after 10 years we are not able to collect from the Government in view of paucity of funds. In view of that there should be an exemption for showing of income receivable from Government in the books of account/ alterna- tively such income should be accounted on cash basis. 80IA Deduction for Power Generating undertaking:- Ȉ ”‘ϐ‹– †‡”‹˜‡† ˆ”‘ ‘’‡”ƒ–‹‘ ‘ˆ ‹† ‹ŽŽ —‹– ‹• COVER STORY ƒ–‹‘ƒŽ‹œƒ–‹‘ ‘ˆ š…‹•‡ —–› ‘ ƒ ƒ†‡ ‹„”‡Ȁ ‹Žƒ‡– € Š‡

50. †—•–”› ƒ† ‘˜‡”‡– Šƒ˜‡ ”‡…‘‰‹œ‡† –Š‡ ‡‡† ˆ‘” ƒ ϐ‹„”‡ ‡—–”ƒŽ ’‘Ž‹…› ‡š…‹•‡ ”‡‰‹‡ ˆ‘” –Š‡ –‡šǦ –‹Ž‡• ‹†—•–”›ǡ ‹ ‘”†‡” –‘ ”‡ƒŽ‹œ‡ –Š‡ ‹‡•‡ ’‘–‡–‹ƒŽ ˆ‘” growth that exists in the Man Made Fibre based products ƒ† ƒŽ•‘ –‘ ”‡…–‹ˆ› –Š‡ ‹•ƒ–…Š „‡–™‡‡ –Š‡ ϐ‹„”‡ …‘Ǧ sumption patterns in India and our major importing coun- –”‹‡•Ǥ ”‡†—…–‹‘ ‹ š…‹•‡ —–› ”ƒ–‡ ˆ”‘ ͳʹΨ –‘ ͸Ψ ‘ ƒ ƒ†‡ ‹„”‡• ‘ ’ƒ” ™‹–Š …‘––‘ ϐ‹„”‡ ™‹ŽŽ Ž‡ƒ† –‘ ‹Ǧ crease in demand and achieve the above targets along-with increased revenue. Further to reinforce our demand for parity in duty structure, we would like to highlight that in our neighboring countries like China, Pakistan, Indonesia, Thailand and Turkey –Š‡”‡ ‹• ‘ †‹ˆˆ‡”‡…‡ ‹ †—–‹‡• ‘ ƒ ƒ†‡ ϐ‹„”‡ ƒ† …‘––‘ ϐ‹„”‡ Ǥ Moreover with the increase in Excise duty as per the de- –ƒ‹Ž• ‰‹˜‡ „‡Ž‘™ǡ –Š‡ …ƒ’ƒ…‹–› —–‹Ž‹œƒ–‹‘ ‘ˆ –Š‡ ƒ ƒ†‡ ‹Ǧ bre industry has come down substantially leading to revenue loss to the government as well. Moreover, the reduction in the duty for raw materials such ƒ• ǡ •Š‘—Ž† ˆ‘ŽŽ‘™ ƒ• ƒ Ž‘‰‹…ƒŽ •‡“—‡…‡ –‘ ƒ˜‘‹† ƒ ‹˜‡”–‡† †—–› •–”—…–—”‡Ǥ

51. ˜‹‡™ ‘ˆ ƒ„‘˜‡ǡ –Š‡ š…‹•‡ —–› ‘ ƒ ƒ†‡ ‹„”‡• ƒ› „‡ ”‡†—…‡† –‘ ͸ΨǤ Technical Textiles Ȉ ‡–”ƒŽ š…‹•‡ —–› ‡š‡’–‹‘ ƒ› „‡ ‡š–‡†‡† –‘ „•‘”„‡– ‘––‘ ‘‘Žǡ ƒ—œ‡ǡ ƒ†ƒ‰‡•ǡ ‡–…Ǥǡ —•‡† ƒ• †”‡••Ǧ ing material for wound and incisions. II) Customs Duty € ’‡…‹ƒŽ ††‹–‹‘ƒŽ —–› ȋͶΨ Ȍ ™ƒ• ‹–”‘†—…‡† ƒ‹Ž› –‘ …‘’‡•ƒ–‡ ™Š‡ ‹– ™ƒ• ͶΨǤ Š‡”‡ˆ‘”‡ǡ may be exempted for all the goods which are exempted from Refund of SAD to Manufacturers € The import of raw materials by manufacturers at- –”ƒ…–• ƒ ’‡…‹ƒŽ ††‹–‹‘ƒŽ —–› ‘ˆ ͶΨ ‘˜‡” ƒ† ƒ„‘˜‡ –Š‡ ƒ•‹… —•–‘• —–›ǡ ǤǤ Ǥ ƒ† ‘–Š‡” †—–‹‡•Ǥ –Š‡ ‘–Š‡” hand, if the raw materials are imported by Traders, they are ‡–‹–Ž‡† –‘ ‰‡– ”‡ˆ—† ‘ˆ Ǥ Ǥ Ǥ ‘ –Š‡ ˆ—”–Š‡” •ƒŽ‡ ‘ˆ –Š‡•‡ raw materials to manufacturers. • –Š‡ ƒ—ˆƒ…–—”‡”• ‹ …‡”–ƒ‹ •‡‰‡–• ‘ˆ ‹†—•–”› Ž‹‡ ‘Ž›‡•–‡” ‹„”‡ ƒ”‡ —ƒ„Ž‡ –‘ —–‹Ž‹œ‡ –Š‡ ‹’‘”– †—–› …”‡†‹– against the duty on output, it is therefore requested that similar facility of refund should also be allowed to manufacturers ™Š‘ ƒ”‡ —ƒ„Ž‡ –‘ —–‹Ž‹œ‡ –Š‡ …”‡†‹– ‘ˆ †—–›Ǥ ‹…‡ –Š‡ ”ƒ–‹‘ƒŽ‡ „‡Š‹† Ž‡˜›‹‰ ‘ ‹’‘”– ‹• –‘ …‘—–‡” „ƒŽƒ…‡ ǡ –Š‡ ”ƒ–‡ ƒ› „‡ ϐ‹š‡† ‘ ’ƒ” ™‹–Š ”ƒ–‡ ‘ˆ ʹΨǤ SIMA- SOUTH INDIA MILLS ASSOCIATION

52. www.textilevaluechain.com TEXTILE VALUE CHAIN | Jan 2015 15 eligible for deduction from Gross Total Income as per section ͺͲ

53. ‘ˆ –Š‡

54. …‘‡ ƒš …–Ǥ • ’‡” –Š‡ Žƒ–‡•– Š‹‰Š …‘—”– ”—Ž‹‰ǡ it is held that there is no need for notionally carrying forward and setting off the same depreciation and loss (which is al- ”‡ƒ†› •‡– ‘ˆˆ ƒ‰ƒ‹•– –Š‡ ‘–Š‡” „—•‹‡•• ’”‘ϐ‹–• ‘ˆ –Š‡ ƒ••‡••‡‡Ȍ in computing the quantum of deduction available under sec- –‹‘ ͺͲ

55. Ǥ Ž•‘ –Š‡ ‘—”– ”—Ž‡† –Šƒ– –Š‡ —ƒ„•‘”„‡† †‡’”‡…‹ƒǦ tion already set off in earlier years could not be reduced from ’”‘ϐ‹–• ˆ‘” …‘’—–‹‰ †‡ †—…–‹‘ —†‡” •‡…–‹‘ ͺͲ

56. Ǥ —– –Š‡

57. …‘‡ ƒš …– ’”‘˜‹•‹‘ ‘ˆ •‡…–‹‘ ͺͲ

58. ȋͷȌ ‹• ‘– …Ž‡ƒ”Ž› †‡ϐ‹‡† ƒ† –Š‡”‡ ‹• ƒ †‹•’—–‡ ‰‘‹‰ „‡–™‡‡ –Š‡ †‡Ǧ ’ƒ”–‡– ƒ† –Š‡ ƒ••‡••‡‡ ˆ‘” ™Š‹…Š –Š‡ †‡’ƒ”–‡– Šƒ• ϐ‹Ž‡† ƒ ƒ’’‡ƒŽ „‡ˆ‘”‡ —’”‡‡ ‘—”– „› …‘–‡†‹‰ –Šƒ– ’”‘ϐ‹–• and gains has to be worked out after taking into consideration of the brought forward losses / unabsorbed depreciation of earlier years of windmill unit (power undertaking) in deter- mining the quantum of deduction admissible even though –Š‡› Šƒ˜‡ „‡‡ •‡–Ǧ‘ˆˆ ƒ‰ƒ‹•– –Š‡ ’”‘ϐ‹–• ‘ˆ –Š‡ ‘–Š‡” —†‡”Ǧ taking of the assessee. TDS on Commission payment to Non-Resident agents outside India for canvassing of orders of export sales:- Ȉ Š‡”‡ ‹• ƒ Ž‹–‹‰ƒ–‹‘ ‰‘‹‰ ‘ „‡–™‡‡ –Š‡ †‡’ƒ”–Ǧ ment and the assessee towards tax deduction on commission payments made to non-resident agents towards export sales. Various Supreme Court / High Court / Tribunal have held that commission payments paid in foreign currency to non-resident agents outside India is not liable for Tax deduction under –Š‡ ’”‘˜‹•‹‘• ‘ˆ •‡…–‹‘ ͳͻͷ ‘ˆ –Š‡

59. …‘‡ ƒš …–Ǥ In-spite of the various Higher Court decisions ruling in favour of the assessee on this issue, the department is still disal- lowing the expenditure of commission payment made to non- resident agents in the Income Tax assessment. ‡…‡ –Š‡ ƒ„‘˜‡ ‹••—‡ ƒ› „‡ …‘•‹†‡”‡† ‘ –Š‡ ‰”‘—†• –Šƒ– ‹• ‘– ƒ’’Ž‹…ƒ„Ž‡ ‘ …‘‹••‹‘ ’ƒ›‡–• to non-resident agents outside India for canvassing of orders of export sales. Investment allowance to Manufacturing company under section 32AC:- This allowance is only applicable to corporate. This ben- ‡ϐ‹– •Š‘—Ž† „‡ ‡š–‡†‡† –‘ ‘–Š‡” ƒ••‡••‡‡• ƒŽ•‘ ™Š‘ ƒ”‡ ‡Ǧ gaged in manufacturing activity. Besides this, the threshold limit of investment may be reduced to Rs.10 crores from Rs.25 …”‘”‡• ȋ‹ ƒ ›‡ƒ”ȌǤ Š‹• •Š‘—Ž† „‡‡ϐ‹– •ƒŽŽ •…ƒŽ‡ ƒ••‡••‡•Ǥ VIII) Companies Act Ȉ ƒŽŽ …‘’ƒ‹‡• ™‹–Š Ž‡•• –Šƒ ‹˜‡ ”‘”‡• …ƒ’‹–ƒŽ •Š‘—Ž† „‡ ‡š‡’–‡† ˆ”‘ ‘’ƒ‹‡• …–Ǥ ‡ƒŽ–‹‡• ‹ ‘’ƒǦ ‹‡• …– •Š‘—Ž† „‡ ”‡†—…‡† ™Š‹…Š Šƒ• „‡‡ ƒ”„‹–”ƒ”‹Ž› ϐ‹š‡†Ǥ Ȉ ‡‡• ˆ‘” ϐ‹Ž‹‰ ”‡–—”• ‡–… Šƒ˜‡ Œ—’‡† ‡‘”‘—•Ž›Ǥ ‹Ž‡ ‡‡’‹‰ †‘‡• ‘– …‘•– •‘ —…Š ƒ† ‡Ž‡…–”‘‹… ϐ‹Ž‡ …‘•– ‹• practically nothing. Fees should be reduced to a reasonable level and should not be considered as revenue producing. IX) General Ȉ ‘—”– ˆ‡‡ •–ƒ’ „‡‹‰ ƒˆϐ‹š‡† ‹ ˜‡”› •ƒŽŽ †‡‘‹Ǧ ƒ–‹‘• ‘ †‘…—‡–• •—…Š ƒ• …‘’—–‡”‹œƒ–‹‘ Ž‡––‡”• ƒ† such other documents may be disposed with in view of non- availability of these stamps and cost of manufacture of these stamps are more than their face value. Ȉ ‡˜‡—‡ •–ƒ’ „‡‹‰ ƒˆϐ‹š‡† ‘ ’ƒ›‡– ‹ …ƒ•Š may be increased from the exemption limit of Rs.5000.00 to Rs.50,000.00. Stamp duty on physical share transfers could be removed since shares in demat form do not pay stamp duty. Period Basic Excise Duty (BED) %] Mar 2006 – Nov 2008 8 ‡… ʹͲͲͺ Ȃ — ʹͲͲͻ 4 Jul 2009 – Feb 2010 8 Mar 2010 – Mar 16, 2012 10 ƒ” ͳ͹ǡ ʹͲͳʹ ‘™ƒ”†• 12 COVER STORY

60. Ȏ 1) Excise duty (i) Textiles The present optional scheme of payment of excise duty should continue till the GST is introduced. Under the optional scheme, if the option of exempted route is selected, then no cenvat credit is available. In the case of duty-paid route, the ‡ˆˆ‡…–‹˜‡ ”ƒ–‡ ‘ˆ †—–› ‹• ͸ ’‡” …‡– ‹ –Š‡ …ƒ•‡ ‘ˆ ͳͲͲΨ ‘––‘ yarn, fabrics, made-ups and ready-made garments. The same ”ƒ–‡ ‘ˆ †—–› •Š‘—Ž† …‘–‹—‡ ‘ ͳͲͲ Ψ …‘––‘ ›ƒ”ǡ ˆƒ„”‹…•ǡ made-ups and garments. ȋ‹‹Ȍ ƒǦƒ†‡ Ƥ„”‡• ‹…Ž—†‹‰ ƤŽƒǦ ment yarns

61. ‡‡’‹‰ ™‹–Š –Š‡ ”‡…‘‡†ƒ–‹‘ ˆ‘” ϐ‹„”‡ ‡—–”ƒŽ‹–› made in the National Fibre Policy prepared by the Ministry of Textiles, in consultation with the concerned Ministries, we •–”‘‰Ž› ”‡…‘‡† –Šƒ– ‡š…‹•‡ †—–› ‘ ƒǦƒ†‡ ϐ‹„”‡• ‹Ǧ …Ž—†‹‰ ϐ‹Žƒ‡– ›ƒ”• ƒ† ‘ ›ƒ”ǡ ˆƒ„”‹…•ǡ ƒ†‡Ǧ—’• ƒ† ‰ƒ”Ǧ ‡–• …‘–ƒ‹‹‰ ƒǦƒ†‡ ϐ‹„”‡• ‹…Ž—†‹‰ ϐ‹Žƒ‡– ›ƒ”• „‡ „”‘—‰Š– ‘ ’ƒ” ™‹–Š ͳͲͲΨ …‘––‘ ›ƒ”ǡ ˆƒ„”‹…•ǡ ƒ†‡Ǧ—’• ƒ† ‰ƒ”‡–• ‹Ǥ‡Ǥ ͸ΨǤ SIMA- SOUTH INDIA MILLS ASSOCIATION

62. TEXTILE VALUE CHAIN | Jan 201516 www.textilevaluechain.comCOVER STORY ȋ‹‹‹Ȍ —”ƒ…‡ ‘‹ŽȀ —‡Ž ‘‹Ž Excise duty on furnace oil and fuel oil used for captive generation of electricity in textile mills should be abolished, •—„Œ‡…– –‘ –Š‡ ˆ—Žϐ‹ŽŽ‡– ‘ˆ …‘†‹–‹‘• ‘ ʹ ƒ† ͵ ‘ˆ ‘–‹ϐ‹…ƒǦ –‹‘ ‘ ͳʹȀʹͲͳʹǦ †ƒ–‡† ͳ͹Ǧ͵ǦʹͲͳʹǡ ƒ• ƒ‡†‡† ˆ”‘ –‹‡ to time which are reproduced below : “Condition No.2 Where such use is elsewhere than in the factory of production, the exemption shall be allowed if the procedure laid down in the Central Excise (Removal of Goods at concessional Rate of duty for Manufacture of Excisable Goods) Rules, 2001, is followed. Condition No.3 The exemption shall be allowed if it has been proved to –Š‡ •ƒ–‹•ˆƒ…–‹‘ ‘ˆ ƒ ‘ˆϐ‹…‡” ‘– „‡Ž‘™ –Š‡ ”ƒ ‘ˆ –Š‡ ‡’—–› ‘‹••‹‘‡” ‘ˆ ‡–”ƒŽ š…‹•‡ ‘” –Š‡ ••‹•–ƒ– ‘‹••‹‘Ǧ er of Central Excise, as the case may be, having jurisdiction –Šƒ– •—…Š ‰‘‘†• ƒ”‡ …Ž‡ƒ”‡† ˆ‘” –Š‡ ‹–‡†‡† —•‡ •’‡…‹ϐ‹‡† ‹ …‘Ž— ȋ͵Ȍ ‘ˆ –Š‡ ƒ„Ž‡Ǥǳ (iv) Textile Machinery,Components and Parts The textile industry has been upgrading its manufacturing technology to rise to the international levels , under the scheme of Technology Upgradation of Central Government. Our recommendation is all textile machinery and parts and accessories thereof covered by heading nos. 8443, 8444, ͺͶͶͷǡ ͺͶͶ͸ǡ ͺͶͶ͹ǡ ͺͶͶͺ ƒ† ͺͶͷͳ „‡ •—„Œ‡…– –‘ –Š‡ …‘…‡•Ǧ sional duty of 6 per cent which are installed in textile mills by following the appropriate procedure. 2) Customs duty and SAD ƒǦƒ†‡ ‹„”‡• ‹…Ž—†‹‰ ƤŽƒ‡– ›ƒ”• To become competitive in the international market, it is ‡…‡••ƒ”› –‘ ƒ‡ ƒ˜ƒ‹Žƒ„Ž‡ ƒǦƒ†‡ ϐ‹„”‡• ‹…Ž—†‹‰ ϐ‹ŽƒǦ ment yarns at international prices, hence we recommend that –Š‡ ’”‡•‡– …—•–‘• †—–› ‘ˆ ͷ ’‡” …‡– ƒ† ‘ˆ Ͷ ’‡” …‡– should be abolished. —”ƒ…‡ ‘‹ŽȀ —‡Ž ‘‹Ž The concessional rate of duty on petroleum products fall- ‹‰ —†‡” ǤǤ Ž‹‡ ‘ ʹ͹ͳͲ ‹• ͷΨǤ ‘” ‰‡‡”ƒ–‹‘ ‘ˆ …ƒ’–‹˜‡ power in textile mills at economic cost, we recommend that Furnace oil/Fuel oil be charged to nil customs duty. Textile Machinery It is our long-standing request that customs duty on parts and components of imported machinery required for maintenance should also be charged the same customs duty as the corresponding shuttleless looms and machinery, that is nil duty in the case of parts and components of shuttleless looms ƒ† …‘…‡••‹‘ƒŽ †—–› ‘ˆ ͸Ψ ‹ –Š‡ …ƒ•‡ ‘ˆ ’ƒ”–• ‘ˆ ƒ…Š‹‡”› and equipmentsIt 3) Working Capital —‘›‡† „› –Š‡ †”‘’ ‹ ‹ϐŽƒ–‹‘ ™Š‹…Š ˆ‡ŽŽ –‘ ƒ ϐ‹˜‡Ǧ›‡ƒ” low of 2.38 per cent in Sept 2014, the textile industry natu- rally expects a cut in the interest rate. In addition, the industry ”‡“—‡•–• ˆ‘” ͵Ψ ‹–‡”‡•– •—„˜‡–‹‘ ‹ –Š‡ ’”‡ ƒ† ’‘•– •Š‹’Ǧ ment rupee export credit for textiles and garments. 4. Brand equity and distribution net work ‡ ”‡“—‡•– ‘˜‡”‡– –‘ ”‡†‡” ϐ‹ƒ…‹ƒŽ Š‡Ž’ ˆ‘” ‡•Ǧ tablishing brand equity and distribution network, abroad. Anti-dumping duty –‹Ǧ†—’‹‰ †—–› Šƒ• „‡‡ ‹’‘•‡† ‘ ˆ—ŽŽ›Ǧ†”ƒ™ ›ƒ” of polyester imported from China and Thailand which will re- ƒ‹ ‡ˆˆ‡…–‹˜‡ —’–‘ ʹͷ–Š ƒ”…Š ʹͲͳͷǤ – –Š‡ •ƒ‡ –‹‡ǡ ƒǦ ti-dumping duty on fully-drawn yarn of polyester imported from Vietnam was in force upto 26th March 2014 which has been extended. Besides, anti-dumping duty has been imposed on partial- ly oriented yarn imported China, which is effective upto 1-5- ʹͲͳ͹Ǥ The user industry of such yarn is the Texturising indus- –”› ™Š‹…Š ‹• ™‘‡ˆ—ŽŽ› •Š‘”– ‘ˆ ˆ—†• –‘ ϐ‹‰Š– –Š‡ ƒ–‹Ǧ†—’‹‰ †—–› ‹˜‡•–‹‰ƒ–‹‘•Ǥ • ƒ ”‡•—Ž–ǡ –Š‡ †‘‡•–‹… ‹†—•–”› •—…Ǧ ceeds in getting anti-dumping duty imposed. The imposition of a anit-dumping duty has a cascading effect and therefore the user weaving industry is preferring to import texturised yarns whose imports are increasing. Hence it is the texturising industry which is suffering heavy set-back. Many texturising units have been closed down or are at –Š‡ ˜‡”‰‡ ‘ˆ …Ž‘•—”‡Ǥ ŒŽ› ͶͲǦͶͷΨ ‘ˆ –Š‡ ‹†—•–”› ‹• ™‘”‹‰Ǣ but it is more appropriate to say that it is virtually trembling. Government is requested to immediately constitute a •ƒŽŽ ‘‹––‡‡ –‘ ϐ‹† ‘—– –Š‡ ”‡ƒ•‘• ˆ‘” –Š‡ ’‹–‹ƒ„Ž‡ …‘†‹Ǧ tion of the texturising industry and submit a report in a time- bound manner in a period of 3 months, so that necessary relief could be extended to the industry forthwith. 5. Service Tax ‡”˜‹…‡• ‰‹˜‡ „› ƒ ••‘…‹ƒ–‹‘ ƒ”‡ •—„Œ‡…– –‘ ‡”˜‹…‡ ƒšǤ ••‘…‹ƒ–‹‘• ƒ”‡ ˜‘Ž—–ƒ”› ‘”‰ƒ‹œƒ–‹‘• ™Š‹…Š ƒ”‡ ƒ ‡š–‡†‡† ƒ” ‘ˆ ‡„‡” ‘”‰ƒ‹œƒ–‹‘•Ǥ ••‘…‹ƒ–‹‘• Šƒ˜‡ a rightful place in the Indian economy, because they explain to their members amendments in various Laws, Rules, Regu- Žƒ–‹‘• ‡–…Ǥ ••‘…‹ƒ–‹‘• ƒŽ•‘ ’Žƒ…‡ „‡ˆ‘”‡ –Š‡ ‘˜‡”‡– ’”‘„Ž‡• ‘ˆ –Š‡‹” ‡„‡”•Ǥ Š—•ǡ ••‘…‹ƒ–‹‘• ƒ”‡ †‘‹‰ —•‡Ǧ ˆ—Ž ™‘”Ǥ ‘˜‡”‡– ƒŽ•‘ –ƒ‡• Š‡Ž’ ‘ˆ ••‘…‹ƒ–‹‘• ‹ ’‘Ž‹Ǧ cy formulation, replying to Parliament Questions, etc. Hence, Šƒ˜‹‰ ”‡‰ƒ”† –‘ –Š‡ ‘„Œ‡…–‹˜‡• ƒ† ˆ—…–‹‘• ‘ˆ ••‘…‹ƒ–‹‘• FAITMA

63. www.textilevaluechain.com TEXTILE VALUE CHAIN | Jan 2015 17 COVER STORY and the role played by it in assisting Government, it would be ˆƒ‹” ƒ† ”‡ƒ•‘ƒ„Ž‡ –‘ ‡š’‡…– –Šƒ– ••‘…‹ƒ–‹‘• •Š‘—Ž† „‡ ‡šǦ empt from Service Tax. •‡”‹‘—• ’”‘„Ž‡ ˆ‘” ••‘…‹ƒ–‹‘ ‹• –Š‡ ‘‹– ‘ˆ ƒšǦ ation system, under which Service Tax becomes payable in the month following the one in which the invoice is issued, regard- less of the fact whether the member has paid the subscription or not.

64. ‡˜‡”› ••‘…‹ƒ–‹‘ǡ –Š‡”‡ ƒ”‡ •‘‡ ‡„‡”• ™Š‘ ”‡•‹‰ their membership after receiving the invoice. For a voluntary ‘”‰ƒ‹œƒ–‹‘ Ž‹‡ ••‘…‹ƒ–‹‘ ‹– ‹• ‹’‘••‹„Ž‡ –‘ ‹•‹•– ‘ ‡Ǧ bers to pay subscription on the issue of invoice. Š‹• ‹• ‘‡ ‘”‡ ”‡ƒ•‘ ™Š› ••‘…‹ƒ–‹‘• •Š‘—Ž† „‡ ‡šǦ ‡’– ˆ”‘ •‡”˜‹…‡ –ƒšǤ

65. ˆǡ ˆ‘” ƒ› ”‡ƒ•‘ǡ ‘—” „‘ƒϐ‹†‡ ”‡“—‡•– is not acceptable, the least that Government should do is to ’‡”‹– ••‘…‹ƒ–‹‘• –‘ ƒ‡† ‘” …ƒ…‡Ž ‹˜‘‹…‡•ǡ †‡’‡†Ǧ ing upon the time of the resignation by the members of their membership.

66. ǯ

67. ȍ

68. Ȏ A. EXCISE DUTY : Ȉ š…‹•‡ †—–› ‘ ƒŽŽ ‹–‡• ‘ˆ –‡š–‹Ž‡ ƒ…Š‹‡”› •Š‘—Ž† „‡ ‹ ‰‡‡”ƒŽ ƒ– ͺΨǡ –Š‡”‡ •Š‘—Ž† „‡ ‘ ‡š‡’–‹‘Ǥ Ȉ š…‹•‡ †—–› ‘ ƒŽŽ ’ƒ”–•ǡ …‘’‘‡–• ƒ† ƒ……‡••‘”‹‡• ‘ˆ –Š‡ –‡š–‹Ž‡ ƒ…Š‹‡”› ‹ ‰‡‡”ƒŽ •Š‘—Ž† „‡ ͺΨǤ Ȉ š…‹•‡ †—–› ‘ –‡š–‹Ž‡ ƒ…Š‹‡”› —†‡” ‹•–• ͷ Ƭ ͸ •Š‘—Ž† „‡ ƒ– —‹ˆ‘” ”ƒ–‡ ‘ˆ ͺΨǤ Correction: This item should be like “HTHP yarn dyeing machine complete with or without dye ‹–…Š‡ ƒ† ƒ……‡••‘”‹‡•ǳ Ȉ š…‹•‡ †—–› ‘ ’ƒ”–•Ȁ…‘’‘‡–• ‘ˆ ƒ…Š‹‡• —†‡” ‹•– ͷ Ƭ ͸ •Š‘—Ž† ƒŽ•‘ „‡ ƒ– ͺΨǤ Sincetheusertextileindustrydoesnotpayanyexciseduty, no SET OFF facility is available to them on purchases of textile ƒ…Š‹‡”›Ǥ • ƒ ”‡•—Ž– –Š‡ …‘•– ‘ˆ –‡š–‹Ž‡ ƒ…Š‹‡”› ‹…”‡ƒ•‡• –‘ –Šƒ– ‡š–‡–Ǥ ”‡†—…‡† ‡š…‹•‡ †—–› ‘ˆ ͺΨ ™‘—Ž† ”‡†—…‡ –Š‡ burden of the user industry. The machinery manufacturing sector needs a support to improve their performance. This will help them to get more demand and consequent increase their production as well as capacity and would in turn help employment generation. Further, there should be uniformity in the excise duty on machines and its parts. This would also help the government to compensate the loss of revenue for the proposal as above. Uniform rate also helps the manufacturers to get set off against the duty paid on inputs. Suggestions : —•–‹ϐ‹…ƒ–‹‘ ǣ B. CUSTOMS DUTY : Ȉ Ž‘‘” Ž‡˜‡Ž ‘ˆ …—•–‘• †—–› ‘ ƒŽŽ ‹–‡• ‘ˆ –‡š–‹Ž‡ ƒ…Š‹‡”› ‹ ‰‡‡”ƒŽ •Š‘—Ž† „‡ ͹ǤͷΨǤ Ȉ ‡•–”‹…– –Š‡ ”‡†—…–‹‘ ‘ˆ ‹’‘”– †—–› ȋͲΨ †—–›Ȍ ‹ ”‡•’‡…– of only high tech shuttleless looms such as shuttleless Rapier Ž‘‘ ƒ„‘˜‡ ͹ͲͲ ‡–‡”• ’‡” ‹—–‡ ƒ† ‹”Œ‡– ƒ† ƒ–‡”Œ‡– looms having speed above 1400 1300 meters per minute respectively. Ȉ Š‘—‰Š –Š‡ ‡™ •Š—––Ž‡Ž‡•• Ž‘‘• ƒ”‡ ‹’‘”–‡† ƒ– ͲΨ †—–›ǡ –Š‡”‡ ‹• ƒ„‹‰—‹–› ‹ –‡”• ‘ˆ —•–‘• —–› ƒ••‡••‡– ‘ˆ Parts Components imported for manufacture of shuttleless looms domestically. It seems the Government’s intention is to ‰”ƒ– ͲΨ †—–› –‘ –Š‡ †‘‡•–‹… ƒ—ˆƒ…–—”‡”• Š‘™‡˜‡” –Š‡› ƒ”‡ ‘– ‰‡––‹‰ –Š‡ „‡‡ϐ‹– —†‡” –Š‹• ˆ”‘ ƒŽŽ –Š‡ ’‘”–• ˆ‘” their manufacturing. Ȉ

69. – ‹• –Š‡”‡ˆ‘”‡ •—‰‰‡•–‡† –‘ ‘†‹ˆ› –Š‡ Ǯƒ”‹ˆˆ ‡ƒ†ǯ ƒ– ǤǤ 406 under General Exemption No. 165 as “8446, 8448 or any ‘–Š‡” …Šƒ’–‡”ǳǤ Ȉ —•–‘• †—–› ‘ ‹–‡• ‘ˆ …”‹–‹…ƒŽ …‘’‘‡–• •—…Š ƒ• Š‹‰Š •’‡‡† ƒ ‘„„› ȋʹͷͲ ”’ Ƭ ƒ„‘˜‡Ȍǡ Ž‡…–”‘‹… ‘„„›ǡ ƒ† Electronic Jacquard (600 hooks and above) for supply along with shuttleless looms made in India should be at nil duty. ȋ‡˜‡—‡

70. ’Ž‹…ƒ–‹‘• ‡…Ž‘•‡† ƒ• ‡š—”‡

71. Ȍ Ȉ Š‡ ”ƒ–‡ ‘ˆ †—–› ‘ ”ƒ™Ǧƒ–‡”‹ƒŽ•ǡ ’ƒ”–•ǡ …‘’‘‡–• Ƭ ƒ…Ǧ cessories should remain less than that on complete import of ƒ…Š‹‡”›ǡ ‹Ǥ‡Ǥ „› ͷΨǤ Š‡”‡ •Š‘—Ž† „‡ †—–› †‹ˆˆ‡”‡–‹ƒŽ „‡Ǧ tween complete machine and the parts/components. Suggestions : FAITMA

72. TEXTILE VALUE CHAIN | Jan 201518 www.textilevaluechain.com —•–‹ϐ‹…ƒ–‹‘ ǣ Ȉ Š‡”‡ ‹• ‡‘—‰Š …ƒ’ƒ…‹–› –‘ ƒ—ˆƒ…–—”‡ Ž‘™ •’‡‡† Ž‘™ tech shuttleless looms in the country. ‘™‡˜‡” –Š‡ …ƒ’ƒ…‹–› —–‹Ž‹œƒ–‹‘ ‹• ‘Ž› ʹͷΨǤ Ȉ Š‡”‡ •Š‘—Ž† ‘– „‡ ƒ› —†—‡ ƒ†˜ƒ–ƒ‰‡ –‘ –Š‡ ˆ‘”‡‹‰ manufacturer/supplier of complete ma chinery. – ’”‡•‡– –Š‡”‡ ‹• ‘ Ž‡˜‡Ž ’Žƒ›‹‰ ϐ‹‡Ž†ǡ †—‡ –‘ ‹Ž †—–› ƒ† ‡š’‘”– •—„•‹†› ‘ˆ ͳͷΨ ‡Œ‘›‡† „› –Š‡ Š‹‡•‡ manufacturers. Further the domestic manufacturers are subjected to local taxes, octroi, sales tax, etc. which are not compensated or set off. Ȉ ƒ—ˆƒ…–—”‹‰ ‘ˆ Š‹‰Š –‡…Š ƒ…Š‹‡”› ‹ –Š‡ …‘—–”› would generate higher revenue for the Government and value addition will be there. Ȉ ƒ…‹Ž‹–ƒ–‹‘ ‘ˆ †‘‡•–‹… ƒ—ˆƒ…–—”‡”• ™‘—Ž† ƒŽ•‘ …”‡ƒ–‡ ƒ ƒ–‘•’Š‡”‡ …‘†—…‹˜‡ ˆ‘”

73. Ȁˆ‘”‡‹‰ …‘ŽŽƒ„‘”ƒ–‹‘Ǥ Ȉ Š‡ƒ’‡” ‹’‘”– ‘ˆ …‘’‘‡–• ˆ‘” Š‹Ǧ–‡…Š ƒ…Š‹‡• ™‘—Ž† ƒŽ•‘ ‡…‘—”ƒ‰‡

74. Ȁ ‘”‡‹‰ …‘ŽŽƒ„‘”ƒ–‹‘Ǥ Ȉ

75. ’‘”– †—–› ‘ •‘‡ †‡†‹…ƒ–‡† ’ƒ”–•Ȁ …‘’‘‡–• ‘ˆ machinery such as compact spinning attachments, drums for —–‘ …‘‡ ™‹†‹‰ ƒ…Š‹‡• ™Š‹…Š ƒ”‡ ‘– ƒ†‡ ‹

76. †‹ƒ •‘ ˆƒ”ǡ •Š‘—Ž† „‡ œ‡”‘ –‘ ˆƒ…‹Ž‹–ƒ–‡ ƒ—ˆƒ…–—”‹‰ ‘ˆ Š‹‰Š –‡…Š machinery to bridge the technology gap. Ȉ —•–‘• †—–› ‘ ‹‰Š ƒ”„‘ –‡‡Ž ‹”‡ ‘† Ƭ ŽŽ‘› –‡‡Ž ‹”‡ ‘† •Š‘—Ž† „‡ ƒ– ͲΨ †—–›Ǥ „‘—– ͳͲΨǦͳͷΨ ‘ˆ –Š‡ ’”‘†—…–‹‘ ‘ˆ …ƒ”† …Ž‘–Š‹‰ ‹• ‡šǦ ported. Such quality of the raw material items which is spe- …‹ϐ‹…ƒŽŽ› †‡•‹‰‡† ˆ‘” –Š‡ ƒ—ˆƒ…–—”‡ ‘ˆ ƒ”† Ž‘–Š‹‰ ‹”‡ is not available indigenously. Therefore import duty on the aforesaid quality of High Carbon Steel Wi re Rod as well as ŽŽ‘› –‡‡Ž ‹”‡ ‘† •Š‘—Ž† „‡ ”‡†—…‡† ˆ”‘ ͷΨ –‘ ͲΨǤ Š‹• would help the domestic manufacturers to compete against cheap imported card clothing wire from China. Ȉ Š‡ …‘†‹–‹‘ ‘Ǥ ͷ ˆ‘” ‹’‘”– ‘ˆ …‘’‘‡–• —†‡” ‹Ž duty for manufacture of shuttleless looms should be done away with. This is an old procedure detrimental to the growth of the industry. When the shuttleless loom is imported at nil duty, the ͷΨ †—–› ‡š‡’–‹‘ ‘ –Š‡ …‘’Ž‡–‡ ˜ƒŽ—‡ ‘ˆ –Š‡ ƒ…Š‹‡• ‹• much higher than the exempted duty in respect of the components because the value of th‡ …‘’‘‡–• ‹• ‘Ž› ͵ͲΨ Ǧ ͶͲΨ ‘ˆ the total value of the machine-shuttleless looms. Therefore, when the Government is not putting any ndi- tion for import of machines by the user industry, the man- —ˆƒ…–—”‹‰ ‹†—•–”› ™Š‹…Š ‹• …‘–”‹„—–‹‰ –‘ –Š‡ ‘ˆ –Š‡ country is being unnecessarily stressed under the condition No.5. Why the manufacturer of machinery should need a permission/approval from the Government authority to import the components when the user of the machines can import without such permission. It is necessary to remove all such bottlenecks to promote indigenous development and employment generation. —•–‹ϐ‹…ƒ–‹‘ ǣ Suggestions : Suggestions : —•–‹ϐ‹…ƒ–‹‘ ǣ C . POLICY MATTERS: Ȉ —’’Ž› ‘ˆ Ž‘…ƒŽ –‡š–‹Ž‡ ƒ…Š‹‡”› –‘ —‹–• —†‡” ƒ† EOU status to be treated at par. Ž–Š‘—‰Š –Š‡ ‡š…‹•‡ †—–› ‹• …Žƒ‹‡† „ƒ… Žƒ–‡” ȋ™Š‹…Š –ƒ‡• ͺǦͳʹ ™‡‡•Ȍ –Š‡ „—›‡”• ϐ‹† ‹– ƒ †‹•ƒ†˜ƒ–ƒ‰‡ –‘ „—› machine locally. Hence excise duty has to be exempted for local supplies under EPCG. This exemption should be given as available for supplies to EOUs to avoid the problem in claim- ing Cenvat on inputs by the suppliers of Capital goods. Ȉ ʹͲͲΨ ™‡‹‰Š–‡† †‡†—…–‹‘ ‘ Ƭ ‡š’‡†‹–—”‡ ‹…—””‡† by all types of companies and partnership/ proprietary units. Š‹• ™‹ŽŽ ‡…‘—”ƒ‰‡ –Š‡ Ƭ •’‡†‹‰ „› –Š‡ •Ǥ Ȉ ”‡‡ ‹’‘”– ‘ˆ –‡š–‹Ž‡ ƒ…Š‹‡”› ‹ •‡…‘† Šƒ† ƒ…Š‹‡• •Š‘—Ž† „‡ ’”‘Š‹„‹–‡† ‘” ”‡•–”‹…–‡† „› •–‹’—Žƒ–‹‰ ƒ •’‡…‹ϐ‹‡† minimum residual life of 10 years and further subject to the condition that the second hand machinery should not be old- ‡” –Šƒ ͷȀ͹ ›‡ƒ”•Ǥ Ȉ

77. ’‘”–‡† •‡…‘†ǦŠƒ† –‡š–‹Ž‡ ƒ…Š‹‡”› •Š‘—Ž† ‘– „‡ ‰‹˜Ǧ en subsidy under the Technology Up-gradation Fund Scheme ƒ† ‹–• †‡”‹˜ƒ–‹˜‡• ƒ‡Ž› ʹͲΨ ƒ† ͳͷΨ …Š‡‡ǡ ‹ –Š‡ ƒ‡ ‘ˆ ‘†‡”‹œƒ–‹‘Ǥ Š‡ ‘˜‡”‡– •Š‘—Ž† ‘– be a party to the technological obsolescence as technology changes in every 3 to 5 year period. Ȉ ƒš „”‡ƒ ˆ‘” ƒ ’‡”‹‘† ‘ˆ ͷ ›‡ƒ”• ˆ‘” ƒ› —‹– ƒ—ˆƒ…–—”Ǧ ing hi-tech item of textile machinery with or without foreign collaboration. This will encourage indigenous development by the MSMEs. D. NECESSARY SCHEMES: Ȉ …Š‡‡ ˆ‘” ‘†‡”‹œƒ–‹‘ǡ –‡…Š‘Ž‘‰› —’Ǧ‰”ƒ†ƒ–‹‘ and productivity enhancement of the TEI: ItisrecommendedtolaunchaTUFdedicatedtotheIndian Suggestions : —•–‹ϐ‹…ƒ–‹‘ ǣ Suggestions :

78. ǯ

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80. Ȏ COVER STORY

81. www.textilevaluechain.com TEXTILE VALUE CHAIN | Jan 2015 19 textile machinery Industry. The fund should have an interest reimbursement outlay of Rs.250 crores for XII Plan and based on similar principles as TUFS and over the following areas: € š’ƒ•‹‘ ƒ† ‘†‡”‹œƒ–‹‘ ‘ˆ ‡š‹•–‹‰ –‡š–‹Ž‡ machinery manufacturing companies € …“—‹•‹–‹‘ ‘ˆ –‡…Š‹…ƒŽ ‘™ǦŠ‘™ ˆ”‘ ‘˜‡”•‡ƒ• € Industry segments regarded as weak or non-existing (rotors spinning, fully automatic winding, high tech ™‡ƒ˜‹‰ǡ •’‡…‹ƒŽ ’—”’‘•‡ ’”‘…‡••‹‰ Ƭ ϐ‹‹•Š‹‰ǡ ‹––‹‰ and industrial sewing equipment) should be eligible for up- ˆ”‘– ͳͲΨ …ƒ’‹–ƒŽ •—„•‹†› ‹ ƒ††‹–‹‘ –‘ ‹–‡”‡•– ”‡‹„—”•‡Ǧ ment to upgrade their manufacturing facility. Ȉ …‘—”ƒ‰‡ ‡•–ƒ„Ž‹•Š‡– ‘ˆ ‡™

82. —‹–• Ƭ ˆ‘”

83. ’”‘‘–‹‘Ǥ A. REDUCTION OF EXCISE DUTY 1. Background 1.1 However current Indian textile sector is not able to ”‡ƒŽ‹œ‡ –Š‡ ”‡ƒŽ ’‘–‡–‹ƒŽ †—‡ –‘ –ƒš ‹‡“—ƒŽ‹–› „‡–™‡‡ ‘––‘ Ƭ ȋœ‡”‘ ‡š…‹•‡ ‘ …‘––‘ Ƭ ͳʹΨ š…‹•‡ ‘ MMF) and it has resulted in India remaining the cotton „ƒ•‡† –‡š–‹Ž‡ ‡…‘‘› ȋ͸ͲΨ …‘––‘ ƒ† ͶͲΨ Ȍ and being underrepresented in global trade (leveraged ™‹–Š ͸ͲΨ ƒ† ͶͲΨ …‘––‘ȌǤ ͳǤʹ ŽŽ Ž‡ƒ†‹‰ –‡š–‹Ž‡ ‡…‘‘‹…• ‹ –Š‡ ™‘”Ž† Šƒ† …”‡ƒ–‡† a perfect eco-system of tax equality among Cotton MMF. 2. Future prospects 2.1 However with the massive economic development and subsequent rising labour costs coupled with ap- preciating currency, energy costs and domestic focus, China will be slowly moving out of the driver’s seat vacating a textile trade space of more than $100 Bn over the next 5-6 years. 2.2 This will perfectly match with GOI new focus to revive manufacturing industry with textile as key segment in its ‘Make in India’ program and it can to do what hap- pened in China during last 2 decades. ʹǤ͵

84. ‘”†‡” –‘ ƒ…Š‹‡˜‡ ƒ –‡š–‹Ž‡ ‹†—•–”› •‹œ‡ ‘ˆ ̈́ ͵ͷͲ „‹ŽǦ lion with an export target of $ 150 billion, India needs ƒ„‘—– ʹͷ „‹ŽŽ‹‘ ‰ ‘ˆ –‡š–‹Ž‡ ϐ‹„‡” ˆ”‘ –Š‡ ’”‡•‡– Ž‡ ion kg comprising of 6 billion kg of Cotton 4 billion kg of MMF. ʹǤͶ ˜ƒ‹Žƒ„‹Ž‹–› ‘ˆ …‘––‘ ‹

85. †‹ƒ ™‹–Š ‰Ž‘„ƒŽ ›‹‡Ž† ‘ˆ ͺͷͲ kg/ha will take Indian cotton production to ~9 Bn kg. Indian cotton is rain dependent and limited agricultural land which will make this target very optimistic. Even in case we assume cotton reaches 10 billion Kg, we need to invest and increase MMF production from current 4 billion kg to 15 billion kg. 2.5 This calls for huge investment plan in MMF plant, machinery and high technology to avert this crisis. MMF being highly technology dependant has a potential of

86. ȍ Ȏ y g India China Pakistan Bangladesh Sri Lanka Indonesia Thailand Cotton Nil 17% Nil Nil 20% 10% 7% MMF 12% 17% Nil Nil 20% 10% 7% Cotton Yarn Nil 17% Nil 1.5 Tk/kg 20% 10% 7% MMF Yarn 12% 17% Nil 1.5 Tk/kg 20% 10% 7% ƒ––”ƒ…–‹‰ ‡‡†‡†

87. Ǥ 2.6 Present investments in MMF sector are not giving remunerative returns. Major units are making losses and several units have been closed in the past due to following reasons: 3. Major reasons are: ͵Ǥͳ š‹•–‹‰ †—–› •–”—…–—”‡ ‹• —‡“—ƒŽ ™‹–Š ƒ ͳʹ Ψ ‡šǦ cise duty on MMF and no excise duty on cotton and †‘™•–”‡ƒ ƒ˜ƒ‹Ž‹‰ ‘ˆ ‘’–‹‘ƒŽ †—–›Ǥ ‡™‡† ϐ‹•…ƒŽ policy approach is leading to stagnant growth in MMF industry and investments. ͵Ǥʹ ‘ ‹’‘”–• ‘ˆ –‡š–‹Ž‡ ‹’—–• ‹• ƒ ƒŒ‘” †‡–‡””‡– impacting growth of exports. 3.3 MMF is highly technology intensive; however there Šƒ• „‡‡ ‘

88. ‹ •‡…–‘” ‹

89. †‹ƒ †—‡ –‘ ’”‡˜ƒ‹ŽǦ ‹‰ ϐ‹•…ƒŽ ’‘Ž‹…‹‡•Ǥ

90. •–‡ƒ† …‘’ƒ‹‡• ’”‡ˆ‡” –ƒ‹‰ –Š‡‹” –‡…Š‘Ž‘‰› ƒ† Ƭ †‡’ƒ”–‡–• –‘ ‡…‘‘‹‡• like China, Vietnam and Bangladesh which have better ϐ‹•…ƒŽ …Ž‹ƒ–‡ ˆ‘” Ǥ 4. Proposal to achieve $350 Bn Textile Industry by 2025: ͶǤͳ ‹•…ƒŽ …‘””‡…–‹‘• ƒ”‡ ‡‡†‡† –‘ „”‹‰ ‹ ϐ‹„”‡ ‡—Ǧ trality in phased manner. There is need to treat MMF gradually at par with cotton in terms of excise and taxes. Propose intermediate duty regime (Excise rate ‘ˆ ʹǦ͸ΨȌ ƒ† „”‹‰ ‡–‹”‡ –‡š–‹Ž‡• …Šƒ‹ ‹ Ǥ Š‡ ’”‡•‡– †—–› ‘ˆ ͳʹΨ „‡ ”‡†—…‡† –‘ ͸Ψ ‘ ƒ† ‹–• ”ƒ™ ƒ–‡”‹ƒŽ•ǡ –Š‡ ϐ‹„”‡ ˆ‘”™ƒ”† …Šƒ‹ ™Š‹…Š Šƒ• œ‡”‘ †—–› „‡ „”‘—‰Š– —†‡” ʹΨ ‡š…‹•‡ †—–›ǤŠ‹• will pave the way for smooth transition of entire textile chain transiting towards lower rate of GST. ͶǤʹ ‹–Š ‹†—•–”› –”ƒ•‹–‹‰ –‘™ƒ”†• ǡ –Š‡ •Š‘—Ž† be removed forthwith to facilitate import of inputs for achieving targeted export growth. 4.3 This will not only bring the revenue neutrality, there will be incremental growth in revenue with projected growth of textile industry as a whole. The revenue projections with the present production are attached. Proposal: i– ‹• ’”‘’‘•‡† –Šƒ– –Š‡ ‡š…‹•‡ †—–› ‘ ƒǦƒ†‡ ƤǦ bre textiles to be reduced to 4% from the 12% currently levied. JUSTIFICATION

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94. TEXTILE VALUE CHAIN | Jan 201520 www.textilevaluechain.com Ǧ

95. ʹͲͲ͸ǦͲ͹ǡ –Š‡ ƒ•‹… š…‹•‡ —–› ȋ Ȍ ‘ˆ ͺΨ ™ƒ• Ž‡˜‹‡† ‘ ’‘Ž›‡•–‡” ’”‘†—…–• ȋ‡Ǥ‰Ǥǡ ǡ ǡ ǡ Ȍǡ ™Š‹…Š ™ƒ• †”ƒ•–‹…ƒŽŽ› ”‡†—…‡† –‘ ͶΨ ‹ ‡…‡„‡” ʹͲͲͺǤ Š‡”‡ƒˆ–‡”ǡ ‹– ”‘•‡ –‘ ͺΨ ‹ —Ž› ʹͲͲͻǤ —„•‡Ǧ “—‡–Ž›ǡ –Š‡”‡ ™ƒ• ƒ ˆ—”–Š‡” ‹…”‡ƒ•‡ –‘ ͳͲΨ ‹ ƒ”…Š ʹͲͳͲ ƒ† ‹ ƒ”…Š ʹͲͳʹ ‹– ‹…”‡ƒ•‡† –‘ ͳʹΨǤ - These successive escalations in excise duty, has left behind the rationale of textile duty to be in line with –Š‡ ϐ‹„”‡Ǧ‡—–”ƒŽ ’‘Ž‹…› ‘ˆ –Š‡ ‘˜‡”‡–Ǥ - It may be mentioned that the end users of Synthetics Textiles are primarily those can afford buying it and easy to maintain. With the proposed reduction the cost of fabrics will be affordable to the poorest of the poor, thus meet the objective of FIBRE SECURITY of the country. - Moreover, higher duty on synthetics also demotes export of value-added fabrics / garments as textile has a long chain and small manufacturers are not able to work to get refund of duty. Excise Duty Collection at 4% Revenue Growth : The exchequer would witness an average positive rate of growth in excise duty collection, by the completion of the decade. Further, it may be pointed out that the ‹‹•–”› Šƒ• ‡’Šƒ•‹œ‡† ‘ –Š‡ ‡‡† –‘ ’”‘‘–‡ –‡š–‹Ž‡• items and also to increase India’s share of these products in the global market. REVENUE IMPLICATIONS OF REDUCTION OF EXCISE DUTY The worked out revenue implications of reduction of ex- …‹•‡ †—–› ‘ –™‘ •…‡ƒ”‹‘• ƒ”‡ ‰‹˜‡ ‹ –Š‡ ‡š—”‡Ǥ ‡ ‘ˆ these may be chosen as both bring in the revenue neutrality. With the projected growth in textile sector as a whole, the rev- ‡—‡ Šƒ• ’‘–‡–‹ƒŽ –‘ ‰”‘™ ˆ‘—” –‘ ϐ‹˜‡ –‹‡• „› ʹͲʹͷǤ B. REMOVAL OF SPECIAL ADDITIONAL DUTY (SAD) PROPOSAL :

96. – ‹• •—‰‰‡•–‡† –‘ ”‡‘˜‡ ͶΨ ‘ ƒŽŽ ƒǦ ƒ†‡ ϐ‹„”‡• ‹ ‘”†‡” –‘ ‡…‘—”ƒ‰‡ ’”‘†—…–‹‘ ‘ˆ ˜ƒŽ—‡ ƒ††Ǧ ed products and make the products in the upper value chain more competitive. JUSTIFICATION : —””‡–Ž›ǡ ’”‹…‡• ‘ˆ ƒ ƒ†‡ ϐ‹„”‡• ™Š‹…Š ‹• „ƒ•‡† ‘ ‹’‘”– ’ƒ”‹–› ’”‹…‡• ‹ –Š‡

97. †‹ƒ ƒ”‡ ‡ƒ”Ž› ʹͲΨ higher than countries like China, Taiwan, Indonesia, Thailand ‡–…Ǥ ’‡…‹ƒŽ ††‹–‹‘ƒŽ —–› ȋ Ȍ –‡†• –‘ ‹…”‡ƒ•‡ –Š‡

98. Ǧ port Parity Price of Man-made Fibres thereby making them more expensive to the manufacturers of value-added products. In order to increase competitiveness of our exports Spe- …‹ƒŽ ††‹–‹‘ƒŽ —–› ȋ Ȍ •Š‘—Ž† „‡ ƒ„‘Ž‹•Š‡† ˆ‘” ‹’‘”– ‘ˆ all Man-made Fibres. C. REMOVAL OF CUSTOMS DUTY PROPOSAL :

99. – ‹• ’”‘’‘•‡† –‘ ™‹–Š†”ƒ™ –Š‡ —•–‘ —–› ‘ ǡ ƒ† ƒŽŽ ƒǦƒ†‡ ϐ‹„”‡• ‹ ‘”†‡” –‘ ‹…”‡ƒ•‡ …‘Ǧ petitiveness of our exports. It will also encourage production of value added products and help to make the products in the upper value chain more competitive. This is in line with the Make in India initiative of Prime Minister recently launched. JUSTIFICATION :The structure of the Indian Man Made Fibre Industry allows them to charge their customers, manufacturers of value added textiles, import parity prices. This makes the price of Man Made Fibres in the hands of the makers of ˜ƒŽ—‡ ƒ††‡† –‡š–‹Ž‡• ƒ– Ž‡ƒ•– ʹͲΨ ‘”‡ ‡š’‡•‹˜‡ –Šƒ ™Šƒ– their counterparts in competing countries pay. This hampers the competitiveness of the Indian Exporters of value added –‡š–‹Ž‡•Ǥ

100. – ‹• ’”‘’‘•‡† –‘ ”‡‘˜‡ –Š‡ —•–‘ —–› ‘ ƒ Made Fibres. D. PRIORITY SECTOR LENDING FOR TEXTILES PROPOSAL : The interest rate subvention scheme covers only limited tariff lines or MSME’s leaving out many of the export- ‡”• ˆ”‘ ‹–• ƒ„‹–Ǥ ‡…‡ǡ ‡š’‘”– ϐ‹ƒ…‡ „‡ ‹…Ž—†‡† ‹ ”‹‘”Ǧ ‹–› ‡…–‘” ‡†‹‰ ™‹–Š •’‡…‹ϐ‹… ƒŽŽ‘…ƒ–‹‘ ƒ†

101. –‡”‡•– ”ƒ–‡ ˆ‘” ‡š’‘”–• „‡ …ƒ’‡† ƒ– ͹ΨǤ SUGGESTION : In order to put exports on growth track there is an urgent need for remedial policy measures to ensure availability of cheaper funds to textile industry and exports. Cheap- er funds for textile industry will improve their competitiveness and give boost to exports. Further, to make subvention scheme more effective we suggest following changes - Remov- al of caps on value of investment i.e. INR 10crs, will enable all –‡š–‹Ž‡ ‡š’‘”–‡”• ”‡‰ƒ”†Ž‡•• ‘ˆ •‹œ‡ ƒ† ˜ƒŽ—‡ ƒ˜ƒ‹Ž –‘ ‹–‡”‡•– •—„˜‡–‹‘Ǥ š–‡•‹‘ ‘ˆ ͵Ψ ‹–‡”‡•– ”ƒ–‡ •—„˜‡–‹‘ –‘ ‡–‹”‡ MMF textiles sector will also help all the exporters to avail this scheme and increase exports. E. SERVICE TAX PROPOSAL:WaivingofServiceTaxontaxableservicetoinsub- …Žƒ—•‡ ȋœœœ‡Ȍ ‘ˆ …Žƒ—•‡ ȋͳͲͷȌ ‘ˆ •‡…–‹‘ ͸ͷ ‘ˆ –Š‡ ‹ƒ…‡ …–ǡ ’”‘˜‹†‡† ‘ •‡”˜‹…‡• –‘ •’‡…‹ϐ‹‡† ƒ••‘…‹ƒ–‹‘•ǡ —†‡” ȋœœœ‡Ȍ ‘ˆ –Š‡ ‹ƒ…‡ …– ˆ‘” –Š‡ ’‡”‹‘† ͳ͸Ǥ͸ǤʹͲͲͷ –‘ ͵ͳǤ͵ǤʹͲͲͺ The Govt. should notify that service tax on taxable services ‡–‹‘‡† ‹ •—„Ǧ…Žƒ—•‡ ȋœœœ‡Ȍ ‘ˆ …Žƒ—•‡ ȋͳͲͷȌ ‘ˆ •‡…–‹‘ ͸ͷ ‘ˆ –Š‡ ‹ƒ…‡ …–ǡ •Š‘—Ž† „‡ ‡š‡’–‡† ˆ‘” –Š‡ ’‡”‹‘† ͳ͸Ǥ͸ǤʹͲͲͷ –‘ ͸Ǥ͹ǤʹͲͲͻ ‘™‹‰ –‘ ‹ƒ†˜‡”–‡– ƒ‘ƒŽ›ǡ ƒ• ‘–‹ϐ‹‡† ˜‹†‡ ‘–‹ϐ‹…ƒ–‹‘ ‘Ǥ ͳ͸ȀʹͲͲͻǦȋȌ †ƒ–‡† ͹–Š —Ž›ǡ ʹͲͲͻ ”‡ƒ† ™‹–Š ‡”˜‹…‡ ƒš ‘””‹‰‡†— ‘–‹ϐ‹…ƒ–‹‘ ‘ǤʹͻǦʹͲͳͳ †ƒ–‡† ʹͷ–Š ’”‹Žǡ ʹͲͳͳ ȋ‘–‹ϐ‹…ƒ–‹‘ ‰‹˜‡ ‹ ‡šǦ

102. Ȍ JUSTIFICATION : ‘–‹ϐ‹…ƒ–‹‘ ‘Ǥ ͳ͸ȀʹͲͲͻǦȋȌ †ƒ–‡† ͹–Š —Ž›ǡ 2009, exemption was given for the services in the sub-clause ȋœœœ‡ȌǤ Š‡”‡ˆ‘”‡ǡ ‹ –Š‡ ‡”˜‹…‡ ƒš ‘””‹‰‡†— ‘–‹ϐ‹…ƒ–‹‘ ‘ǤʹͻǦʹͲͳͳ †ƒ–‡† ʹͷ–Š ’”‹Žǡ ʹͲͳͳ ‡ˆˆ‡…–‹˜‡ ˆ”‘ ͳǤͷǤʹͲͳͳ and covering the period 16.6.2005 to 31.3.2008. Instead of exemption from service tax on membership fee, it should have ”‡ƒ† ƒ• ǲ‡š‡’–‹‘ ˆ”‘ •‡”˜‹…‡ –ƒš ‘ •—„Ǧ…Žƒ—•‡ ȋœœœ‡Ȍ ‘ˆ …Žƒ—•‡ ȋͳͲͷȌ ‘ˆ •‡…–‹‘ ͸ͷ ‘ˆ –Š‡ ‹ƒ…‡ …–Ǥ The Synthetic Rayon Textiles Export Promotion Coun- cil is engaged in promotion of exports of Indian Synthetic Rayon Textiles. For the same, Indian Companies who are into manufacture and exports of these textiles take membership of the Council by paying certain membership fees, in order to avail the services of the Council. With the removal of service –ƒš –Š‡ •ƒ‡ „‡‡ϐ‹– ƒ› „‡ ’ƒ••‡† ‘ –‘ –Š‡ ‡š’‘”–‡”•Ǥ

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106. www.textilevaluechain.com TEXTILE VALUE CHAIN | Jan 2015 21 Mr. T. K. Rout ‡’—–› ‹”‡…–‘” Ǧ ƒ”ket Rsearch Introduction: Š‡ • Ȃ ‡‡”ƒŽ‹œ‡† System of Preference (GSP) allows developing countries to Šƒ˜‡ ’”‡ˆ‡”‡–‹ƒŽ ‘” œ‡”‘ –ƒ”Ǧ iff market access on their exports to European Union (EU). It provides a vital access to EU market in terms of better market access in the largest export destination of the world con- tributing to the growth of developing and lease developed economy most in need. The •…Š‡‡ ™Š‹…Š ™ƒ• –”ƒ…‡† ‹–• „ƒ… –‘ ͳͻ͹ͳǡ Šƒ• „‡‡ ‘—–Ž‹‡† by EU countries in a 10 year framework through regulation industrial, textile and agricultural products and later was applicable for all products from 1995. With the completion of third phase of implementation, the EU has adopted a new reformed GSP scheme from 1st January 2014. The scheme may not only increase the exports particularly the textiles clothing export by manifold times but also would also have ƒ —Ž–‹’Ž‹‡” ‡ˆˆ‡…– ‘ ‘”‡‹‰ ‹”‡…–

107. ˜‡•–‡– ȋ

108. Ȍ ‡Ǧ ployment creation and sustained economic growth. One of the newest additions to the list of countries to enjoy latest „‡‡ϐ‹–• ‘ˆ –Š‡ •…Š‡‡ ‹• ƒ‹•–ƒǤ Š‡ ‡™ •–ƒ–—• ™‹ŽŽ ƒŽŽ‘™ ƒ‹•–ƒ –‘ ‡š’‘”– ʹͲΨ ‘ˆ ’”‘†—…–• ƒ– œ‡”‘ †—–› ƒ† ͹ͲΨ ‘ˆ the products at preferential rates. Possible State of Play: It is expected that the Textiles Ž‘–Š‹‰ ȋƬ Ȍ ‹†—•–”› ‘ˆ ƒ‹•–ƒ ™‹ŽŽ ƒ…Š‹‡˜‡ ƒ „‡‡ϐ‹– of Rs.1 trillion per annum. It is really an encouraging esti- ƒ–‹‘ ˆ‘” ‘—–Š •‹ƒ ”‡‰‹‘ ƒ• ƒ ™Š‘Ž‡Ǥ ‘™‡˜‡”ǡ ƒ †‘—„– has been raised on its impact on other textiles clothing ‡š’‘”–‹‰ …‘—–”‹‡• ‘ˆ ‘—–Š •‹ƒ ”‡‰‹‘ ‹Ǥ‡Ǥ

109. †‹ƒ ƒ† ƒǦ ‰Žƒ†‡•ŠǢ ‡˜‡ ‹ˆ ƒ‰Žƒ†‡•Š ‹• ‡Œ‘›‹‰ œ‡”‘ –ƒ”‹ˆˆ ”‡‰‹‡• †—‡ –‘ •–ƒ–—• ƒ†

110. †‹ƒ –Š‡ •–ƒ†ƒ”† •…Š‡‡ ‘Ž›Ǥ —”–Š‡”ǡ –Š‡ ‹ˆ”ƒ•–”—…–—”ƒŽ „‘––Ž‡‡…•ǡ Žƒ… ‘ˆ •—ˆϐ‹…‹‡– power and gas, shortage of skilled manpower etc. in Paki- •–ƒ ƒ› …”‡ƒ–‡ ƒ …‘•–”ƒ‹– ˆ‘” ƒ‹•–ƒ –‘ ˆ—ŽŽ› ‘’–‹‹œ‡ –Š‡ „‡‡ϐ‹–• ‘ˆ –Š‡ •…Š‡‡ ƒ”‹•‹‰ ‘—– ‘ˆ ’”‡ˆ‡”‡–‹ƒŽ ƒ”‡– ……‡••Ǥ Š‡ •–—†› Šƒ• –”‹‡† –‘ ƒƒŽ›•‡ –Š‡ ‹’ƒ…– ‘ˆ ‡™ •…Š‡‡ ‘ –Š‡ ‡š’‘”– …‘’‡–‹–‹˜‡‡•• ‘ˆ –Š‡ ‘—–Š •‹ƒ Countries particularly India, Pakistan, Bangladesh and Sri Lanka. It is because of the fact that these four countries are the key producers of the textiles and competing with each other across the product lines in EU market. In this regard, the paper has tried to evaluate the trend of exports of three …‘—–”‹‡• ‘ˆ ‘—–Š •‹ƒ ”‡‰‹‘ ‘˜‡” Žƒ•– •‡˜‡ ›‡ƒ”• ™‹–Š ”‡ˆǦ erence to the GSP scheme of the EU and examined the possible implications of new scheme on T C exports by using time series and competitiveness analyses at 6-digit product Ž‹‡• ’ƒ”–‹…—Žƒ”Ž› ‘ …‘––‘ ƒ† …‘––‘ ›ƒ” ȋ Š ͷʹȌǡ ”–‹…Ž‡• ‘ˆ ƒ’’ƒ”‡Žǡ ƒ……‡••‘”‹‡•ǡ ‹– ‘” …”‘…Š‡– ȋ Š ͸ͳȌǡ ”–‹…Ž‡• ‘ˆ apparel accessories, not knit or crochet (Ch 62) and other made textile articles, sets, worn clothing etc. (Ch 63) by using ‡˜‡ƒŽ‡† ‘’ƒ”ƒ–‹˜‡ †˜ƒ–ƒ‰‡ ȋ Ȍ ƒ† ‹– ƒŽ—‡ ‡ƒŽ‹Ǧ sations (UVR). In order to validate the relation of the scheme to that of export of the region, the suitable co-relation model was also used in the estimation. The cost bench marking of the products in these three exporting countries has also been ap- plied so as to study neutralise effects of the cost of production on the scheme. Impact on India: With respect to the impost of T C, the EU has about $ 235 Bn from the world during 2012, out of which –Š‡ ‘—–Š •‹ƒ ”‡‰‹‘ …‘–”‹„—–‡† ƒ„‘—– ̈́ ʹͺǤͶͻ Ǥ Š‡ ”‡Ǧ ‰‹‘ ƒ……‘—–• ͳʹΨ ‘ˆ –Š‡ ‡š’‘”– ‘ˆ Ƭ –‘ Ǥ ‘‰ –Š‡ …‘—–”‹‡•ǡ

111. †‹ƒ ƒ‹•–ƒǡ ƒ‰Žƒ†‡•Š ƒ† ”‹ ƒƒ are the major player. It is pertinent to mention that the countries are competing with each other both in segments as well as at product level in these export destinations. While India exports about $6.64 Bn, Pakistan has $3.88 Bn of export. Ban- gladesh export to EU is mainly consisting of clothing of $14.14 Bn. as in Table – 1. Even if Bangladesh export is high in value ƒ† ‰”‘™–Š ”ƒ–‡ ȋ Ȃ ͳʹǤͶͶΨȌǡ –Š‡

112. †‹ƒ ƒ† ƒ‹•–ƒ ‡šǦ ’‘”– „ƒ•‡– ‹• ‘”‡ †‹˜‡”•‹ϐ‹‡† ‘ …‘’‡–‹–‹‘Ǥ

113. †‹ƒ ƒ† ƒǦ gladesh are competing with Pakistan on products like cotton and cotton yarn (Chapter 52), apparels (Chapter 61 62) and made-ups (Chapter 63). The preferential regime under the New GSP schemes will have an adverse impact on the export ’‡”ˆ‘”ƒ…‡ ‘ˆ –Š‡•‡ ‡‹‰Š„—‘”‹‰ ‘—–Š •‹ƒ …‘—–‹‡• Ž‹‡

114. †‹ƒ Ƭ ƒ‰Žƒ†‡•Š ‹ Ž‹‡— ‘ˆ œ‡”‘ –ƒ”‹ˆˆ ”‡‰‹‡• –‘ ƒ‹•–ƒǤ Further, the estimation shows that the co-relation between the exports of clothing’s from the competing countries ‘ˆ ‘—–Š •‹ƒ Ž‹‡

115. †‹ƒ ƒ‹•–ƒ ƒ† ƒ‰Žƒ†‡•Š –‘ –Šƒ– ‘ˆ total export of clothing’s from all GSP receiving countries de- picts high positive co-relations. Hence Pakistan stands to gain from the higher preferential treatments arising out of GSP plus status, which may neutralise the cost advantages enjoyed by other competing countries of the region. However, even if Pakistan likely to gain from the preferential treatments, the factors like infrastructural bottle necks like scares power and gas supply, lack of quality manpower may create constraints for Pakistan to fully capitalise the preferential arrangements offered by EU. Further the conditions put forth by European Unions in the form of compliance in issues relating to environment, human and labour right laws, governance will adversely affect the realisation. †‡‡’‡” ƒƒŽ›•‹• ‹†‹…ƒ–‡• –Šƒ–

116. †‹ƒ ‹• ‡Œ‘›‹‰ ƒ …‘Ǧ parative advantage in whole segments of textiles and apparel products. The cost-bench marking is also in favour of India. Similarly, Bangladesh has been enjoying comparative advantage in most of the apparel exports to EU. The availability of cheap labour is an added advantage to Bangladesh. Hence only one segment of textiles in which Pakistan is enjoying comparative advantage is other made up textile articles, sets, worn clothing etc (Ch 63) besides some products in Chapter New-EU GSP Plus Scheme of EU and its Impact on TC Export of India GSP - TEX COMMITTE

117. TEXTILE VALUE CHAIN | Jan 201522 www.textilevaluechain.com 52. The country has also been in the fore front in export of the made-ups to EU. Hence Pakistan will able to enhance its market share in most of this products of Ch 63 and few products of apparels and cotton yarns due to the implementation of the GSP Plus schemes. Further, the GSP plus advantages be perceived to be accruing to Pakistan are also likely to trigger strong defensive action from textiles lobbies with the EU (i.e. Italy, Portugal and Greece in Textiles, Romania in clothing) and offensive actions may be initiated by the main non-EU com- petitors of Pakistan (i.e. Bangladesh, China, India, etc.) Conclusion: In synthesis, the extension of the EU’s GSP + preferences to Pakistan will certainly boost its competitiveness, but ultimate success in accessing the EU market in greater quantities will also largely depend on Pakistan’s ability to meet EU consumers’ demand, both in terms of reliable export ˜‘Ž—‡• ƒ† “—ƒŽ‹–›ǡ –‘ ‹…”‡ƒ•‡ ‹–• ’”‘†—…–‹‘ ‡ˆϐ‹…‹‡…›ǡ –‘ invest in technologies and skilled manpower, and to be able –‘ †‡ϐŽ‡…– ‹–• …‘’‡–‹–‘”•ǯ †‡ˆ‡•‹˜‡ ‘” ‘ˆˆ‡•‹˜‡ ƒ…–‹‘•Ǥ ƒ‹Ǧ •–ƒ —•– ‹˜‡•– ‹ ‡™ –‡…Š‘Ž‘‰‹‡•ǡ ’”‘†—…–‹‘ ‡ˆϐ‹…‹‡…›ǡ good management practices, and higher reliability of its supply chain, infrastructure, and safety/quality compliance. The short-term advantages of tariff preferences under the GSP + must be wisely invested for this long-term goal, nor for short- –‡” ’”‘ϐ‹–Ǥ ‘”

118. †‹ƒǡ ‹– ‹• Š‹‰Š –‹‡ –‘ ‡Šƒ…‡ –Š‡ …‘’‡–‹Ǧ tiveness of the sector in terms of reduced cost of production and enhanced quality so as to enjoy the comparative advantage in EU. GSP - TEX COMMITTE New-EU GSP Plus Scheme of EU and its Impact on TC Export of India ‘–‡™‘”–Š› †‡˜‡Ž‘’‡– ‹ –Š‡ ”‡…‡– ’ƒ•– Šƒ• „‡‡ –Š‡ —ˆ‘Ž†‹‰ ‘ˆ ƒ •…Š‡‡ ‘ˆ ‘––‘ ••‘…‹ƒ–‹‘ ‘ˆ

119. †‹ƒǡ –‘ ƒ—‰Ǧ ment consumption of cotton in the country. The cotton season 2014-2015 pr‡•‡–• ƒ „ƒˆϐŽ‹‰ ’‹…–—”‡Ǥ ‡•’‹–‡ ‡””ƒ–‹… ‘•‘‘ǡ –Š‡ …‘––‘ …”‘’ –Š‹• …‘––‘ •‡ƒ•‘ will be the highest on record,, being of the order of 40 million. Cotton prices in the global market have declined substantially. Indian prices have also declined, but prices are not competitive and attractive for foreign buyers. It is apprehended that, cotton exports to China will fall from 11 million bales in 2013- ͳͶ –‘ ͸Ǧ͹ ‹ŽŽ‹‘ „ƒŽ‡• ‹ ʹͲͳͶǦͳͷǡ †—‡ –‘ –Š‡ ”‡•–”‹…–‹˜‡ ‹Ǧ port policy adopted by China. In the meantime, Government has started procurement of cotton under MSP operations. It is somewhat queer that India which, was an importer of cotton some years ago, became the largest exporter of cotton and is now saddled with the problem of disposal of cotton to ensure economic prices to the grower. Cotton is in cost-glut pincer and bold steps are required to maintain the growth of cotton ƒ† ‡…‘‘‹… ”‡–—” –‘ –Š‡ ‰”‘™‡”•Ǥ

120. – ‹• ƒ ƒ––‡” ‘ˆ ‰”ƒ–‹ϐ‹…ƒǦ –‹‘ –Šƒ– –Š‡ ‘––‘ ••‘…‹ƒ–‹‘ ‘ˆ

121. †‹ƒ ȋ

122. Ȍ ‹• ‘ –Š‡ ˆ”‘– ˆ‘‘– ˆ‘” …‘––‘ ’”‘‘–‹‘Ǥ Š‡ ˜‹•‹‘ •–ƒ–‡‡– ‘ˆ

123. •ƒ›• that ‘ it would play the lead role in ensuring the supremacy o King Cotton by increasing consumption at the end-user level. Š‹Ž‡ –Š‡ ’”‘‰”ƒ‡ •–ƒ”–‡† „›

124. ‹• …‡”–ƒ‹Ž› Žƒ—†ƒ„Ž‡ǡ œ‹‰ –‘ ‹– …ƒ „‡ ƒ††‡† ‹ˆ „› …‡”–ƒ‹ …Š‡‹…ƒŽ ’”‘…‡••‡• …‘––‘ fabrics can acquire some of the consumer- preferred qualities ‘ˆ ƒǦƒ†‡ ϐ‹„”‡ ˆƒ„”‹…• Ž‹‡ ™”‹Ž‡Ǧˆ”‡‡ǡ Ž‡•• ‹”‘‹‰ǡ ™ƒ•Š and wear, easy care etc. If scientists become successful, which is bound to happen with sustained efforts, the tide will once again turn in favour of cotton fabrics. It is to be noted here that, the main advan- –ƒ‰‡ ‘ˆ …‘––‘ ˆƒ„”‹…• ‹• –Šƒ– –Š‡› „”‡ƒ–Š‡ ƒ† ƒǦƒ†‡ ϐ‹„”‡ textiles have not been able to acquire this virtue of cotton fabrics. Š‡ ƒ’‡š ‘”‰ƒ‹œƒ–‹‘• ‘ˆ –‡š–‹Ž‡• ƒ† ‰ƒ”‡–• •Š‘—Ž† Œ‘‹

125. ‹ •’‘•‘”‹‰ ’”‘‰”ƒ‡• ‘ˆ •…‹‡–‹ϐ‹… ”‡•‡ƒ”…Šǡ –‘ –Š‡ …‡–”‡• ‘ˆ ‡š–‹Ž‡ š…‡ŽŽ‡…‡ǡ ƒ‡Ž›

126. ǡ

127. ǡ

128. ǡ

129. ƒ†

131. • Šƒ˜‹‰ †‡’ƒ”–‡–• ‘ˆ ‡š–‹Ž‡ ‡…Š‘Ž‘‰› ƒ† ‡’ƒ”–‡–• ‘ˆ Š‡‹…ƒŽ ‡…Š‘Ž‘‰› ‹ –Š‡ ‹˜‡”•‹–› ‘ˆ Mumbai and other reputed Universities. – –Š‡ •ƒ‡ –‹‡ǡ ‹– ‹• ‡…‡••ƒ”› –‘ –ƒ‡ ‘–‡ ‘ˆ •‹‰‹ϐ‹…ƒ– changes in the lifestyle, aspirations of the Indian consumers and their value-conscious approach. Growing consumerism is another dimension to the consumption story. Š‡ †‡…Ž‹‡ ‹ …‘––‘ ’”‹…‡• „› ʹͷΨ ‡ƒ• –Š‡ –”ƒ•ˆ‡” ‘ˆ purchasing power from the cotton sector to the consumers, ™Š‘ ™‹ŽŽ „‡ „‡‡ϐ‹––‡† „› –Š‡ Ž‘™‡” ’”‹…‡• ‘ˆ …‘––‘Ǥ Š‹• ƒ†Ǧ †‹–‹‘ƒŽ ’—”…Šƒ•‹‰ ’‘™‡” —•– „‡ …Šƒ‡Ž‹œ‡† ˆ‘” –Š‡ ’—”Ǧ chase of cotton fabrics. – ’”‡•‡–ǡ …Ž‘–Š‹‰ ƒ……‘—–• ˆ‘” Œ—•– ͹Ψ ‘ˆ Š‘—•‡Š‘Ž† ‡šǦ penses. The present household consumption is worth US $ 54.43 billion. For every increase of one percentage point, in the expenditure of clothing the household consumption will ‰‘ —’ „› ̈́ ͹Ǥ͹ͷ „‹ŽŽ‹‘Ǥ ’’‘”–—‹–‹‡• ƒ”‡ ˜ƒ•– ™Š‹…Š •Š‘—Ž† be exploited for marketing cotton-based products, on the basis of their enhanced qualities. – –Š‡ •ƒ‡ –‹‡ǡ …‘•—’–‹‘ ‘ˆ ƒǦƒ†‡ ϐ‹„”‡ –‡š–‹Ž‡• …ƒ „‡ ‹…”‡ƒ•‡† ‹ˆ –Š‡ †‘‡•–‹… ’”‹…‡• ‘ˆ ƒǦƒ†‡ ϐ‹„”‡• are brought down to an economic level. The shattering load ‘ –Š‡ ƒǦƒ†‡ ϐ‹„”‡ –‡š–‹Ž‡ ‹†—•–”› —•– ”‡†—…‡Ǥ Š‡ †‘Ǧ ‡•–‹… ƒ—ˆƒ…–—”‡”• ‘ˆ ƒǦƒ†‡ ϐ‹„”‡• •Š‘—Ž† ƒ’’”‡…‹ƒ–‡ that Textiles is a low- margin- high-volume industry. When the Ž‡˜‡Ž ‘ˆ …‘•—’–‹‘ ‘ˆ ϐ‹„”‡• ™‹ŽŽ ‰‘ —’ǡ –Š‡ ƒ—ˆƒ…–—”‡”• ™‹ŽŽ ‹…”‡ƒ•‡ ’”‘†—…–‹‘ …ƒ’ƒ…‹–› ƒ† †‡”‹˜‡ –Š‡ „‡‡ϐ‹– ϐŽ‘™Ǧ ing from economy of scale. To make the programme of imparting additional qualities to cotton fabrics a grand success, a central body of apex organi- œƒ–‹‘• ‘ˆ ‘––‘ǡ ‡š–‹Ž‡• ƒ† ƒ”‡–• —•– …‘‡ –‘‰‡–Š‡”Ǥ Š‡ ‹‹•–”› ‘ˆ ‰”‹…—Ž–—”‡ǡ ‘˜‡”‡nt of India should also come forward along with the Ministry of Textiles to supple- ment the funds required for product development. ŽŽ –Š‹• ™‹ŽŽ ”‡•—Ž– ‹ –Š‡ •–”‡‰–Š‡‹‰ ‘ˆ –Š‡ –‡š–‹Ž‡ ˜ƒŽ—‡ chain, and make it cohesive. Only an integrated value chain can power the industry to overcome hurdles and achieve fast- ‡” ‰”‘™–ŠǤ

132. – ‹• ™Š›

133. †‡•‡”˜‡• ƒŽŽ —†‘• ˆ‘” –ƒ‹‰ –Š‡ ”‹‰Š– step in that direction. Hi CAI – Heroes of Textile Value Chain ---[ by V.Y.Tamhane]

JAN 2015 ISSUE

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JAN 2015 ISSUE