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HindustanTimes Mon,22 Sep 2014

Lower import duty can help regain lost ground

Arjun Sharma, Hindustan Times  Ludhiana, July 03, 2014
First Published: 12:48 IST(3/7/2014) | Last Updated: 12:50 IST(3/7/2014)

After highlighting the expectations of auto parts industry in the first part of the series ahead of union budget on July 10, this part focuses on knitwear and textile industry in Ludhiana that has been facing a tough competition from Bangladesh and China. With nearly 12,000 registered hosiery units, the city could become a strong competitor for any part of the world if required amenities are made available.

Different associations of knitwear, shawl and textile industries operate in Ludhiana that try to highlight the issues related to the industry from time to time. Knitwear Club, Shawl Club and Knitwear and Apparel Manufacturers Association of Ludhiana (KAMAL) among others work for the industry.

HEAVY IMPORTS ON MACHINERY

Industrialists related to the knitwear and textile industry rue that there is a heavy import duty on machineries. They say that it has thwarted the upgrading and development of the industry as most of the small players cannot afford such a high duty. At present, import duty on textile machinery is 18.9%. Most of the knitwear and textile machinery is imported to India from China, Japan and Germany.

APPREHENSIONS OF CENTRAL EXCISE

After apprehensions that the central gover nment could impose central excise duty on apparel industry this year, the industry had demanded that no such implementations should be made as they could lead to heavy pressure on the industry that was already facing a tough competition from other countries. The United Progressive Alliance (UPA) government had last year exempted the apparel industry from excise duty.

EASY BANK LOANS ON LOW INTEREST

Industry is also infuriated over high interest rates on banks loans for buying textile machinery. Industrialists say that while interest on car and home loans was lesser, it was much higher for the textile machinery. Industry wishes that a low interest rate on machinery would provide a level playing field to the manufacturers in Ludhiana with rest of the world and would make products cheaper than the present rates.

CONNECTIVITY FOR INDUSTRY

With no direct flights to some of the key cities of the country from Ludhiana, hosiery manufacturers want that airport of the city should be developed and direct flights to Mumbai, Calcutta, Bangalore and Lucknow that have a substantial customer base should be started.

Currently, Sahnewal airport is not operating any flights. A large number of customers do not wish to come to Ludhiana only due to the lack of connectivity. Due to this knitwear industry has to put up exhibitions in New Delhi to attract buyers from across the country. Industry also wants special trains to supply goods to different areas.

SPECIAL INCENTIVES

Industry has also demanded that industrial tax concessions should be provided to even Punjab as it is a landlocked state. Central government had provided special packages to Uttrakhand and Himachal Pradesh last year, but not to Punjab. Industry leaders believe that if concessions are provided to the Punjab industry, no unit will go to these neighbouring states for operations. Several industries have shifted to different states owing to special perks being provided to them.

Darshan Dawar, president of the knitwear club, said, “The industry has been facing a tough competition from China and Bangladesh and reforms at the level of central government level are required. Technology upgrade is the need of hour. We also need international-level training institutes of so that we could compete with other countries.”

Sudarshan Jain, president of the Knitwear and Apparel Manufacturers Association of Ludhiana (KAMAL), said no central excise should be brought in the apparel industry as it could lead to pressure. He said the basic infrastructure, including airport should be developed and connectivity with other states and major cities should be improved. “There are possibilities that we could regain our lost grounds in other countries, like USSR where China made inroads, but some respite in taxes is required from the central government,” Jain said.

Vinod Thapar, chairman of the knitwear club, said, “China and Bangladesh have sophisticated machinery. Import duty in these countries is very less as compared to India. Exhibition centres should also be established by the central government with international infrastructure.”

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