The government should give fiscal incentives like duty refund on more technical textiles products and excise duty reduction on man-made fibres and yarns to give a fillip to the sector, industry body Ficci has said.
In its recommendations to the textiles ministry for taking up the issues with the finance ministry, the chamber said that technical textiles have high export potential and there is a need to incentivise the sector under the Special Focus Product Scheme of Foreign Trade Policy.
Under the scheme, the sector would be eligible for grant of duty credit certificates equivalent to 5% of the final value of exports.
Technical Textiles are specially engineered products used for various applications including medical, protective clothing, automotive, industrial and fire retardants.
Since man-made fibres and yarns are the major raw materials for technical textiles, the excise duty on it should be reduced from 10% to 4% to promote the indigenous production at an affordable prices.
It said that the government should also allow duty free imports of certain speciality fibres and yarns that are not produced in India.
The chamber further recommended to fix drawback and refund rates for new technical textiles products and keep the industry out of the ambit of the proposed Goods and Services Tax (GST) for at least two years.
"There is a huge potential for their exports to developed countries but unfortunately they are bulky in nature and involve prohibitive costs for transportation," it said adding "there is a need for higher export incentives for such products".
FICCI has also sought customs duty exemption on imports of certain raw materials.
The market-size of the technical textile industry is about Rs 41,000-crore. It is estimated that the number would grow at the rate around 12% every year.