Indian textile industry wants the next Union Budget to reduce the excise duty on manmade fibers and bring it on par with that of cotton. The industry has been demanding a level-playing field with respect to cotton for a long time now and some rationalisation is expected from budget 2017-18. The argument is that garments produced through manmade fibers are primarily used by the economically weaker sections of society.
The manmade fiber requirement of the Indian textile industry is expected to jump by at least five times by 2025 from what it is now. Yarns made of polyester and synthetics are in good demand. Fibers like nylon and polyester have an excise duty of 12.5 per cent while for other yarns like cotton the excise duty is negligible.
The industry also wants a 20 per cent excise duty subsidy on handicrafts and handloom sector goods destined for export to the US and East Europe. A long term plan, says the industry, to boost textile exports from India which would enable India to pull ahead of China by 2020 would help. GST also comes into the picture. Since fabrics in the unorganised sector are not covered under excise, the question is how fabrics will be brought into the GST chain.