Presentation - TMMA. Textile Machinery Manufacturers

Report
“INDUSTRY ISSUES &
RECOMMENDATIONS”
By
Mr. S. Harishankar
Chairman, Textile Machinery Manufacturers Association (INDIA)
20th February 2013, New Delhi
TEI – AN OVERVIEW
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The TEI in India is one of the five key engineering sectors.
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Consists of more than 1400 units, with a total investment of Rs.7,800
crore
More than 80% of the units are SMEs
Capacity is Rs. 9100 crore
Provides direct/indirect employment to > 250,000 people
TEI contributes greatly to the competitiveness of the Indian Textile
Industry (TI).

Meets 45-50% of the demand of the Indian textile industry
* (Source: Textiles Committee Survey & TMMA)
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TEI – UPDATE
Particulars
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
(Estmtd)
Production
6155
4063
4245
6150
5280
5770
Import
5255
4411
4357
5000
7500
7500
Export
699
661
582
915
800
900
% Change in
production
-34%
4%
45%
-14%
9.3%
% Change in
import
-16%
-1%
15%
50%
Nil
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TEI – TECHNOLOGICAL CAPACITY
 Ginning & Spinning: In general, at par with international standard.
Foreign manufacturers have their presence in India
 Capacity- Ginning - Adequate and there are exports
 Spinning- Meets over 75% of the requirement
 Items not manufactured - Auto Coner with auto feed and auto doff &
high speed rotor spinning machine
 Weaving Preparatory: At par with international standard. Enough
capacity and production
 Weaving (Shuttleless Looms) - Old technology Rapier looms
(Crank Beat-up)
 New technology Air jet & Waterjet Looms (not tested commercially well)
 New technology Rapier looms (not tested commercially)
 Synthetic Machineries: All kinds of synthetic machines are
produced such as Draw Texturising, TFO Twister, H.S. Winder etc.
except fibre/filament manufacturing chemical plant
CONTD…
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TEI – TECHNOLOGICAL CAPACITY
 Processing Machinery: Technology gaps exists
 Many hi- tech machineries are being manufactured for ex. Continuous
Bleaching Plant, Dyeing Plant, Washing range, Preshrinking Range, Indigo
dyeing Plant etc.
 Some of the special purpose machineries are not yet developed
 Existing capacity meets over 50% of the requirement
 Parts/Components and Accessories:
 Except some critical parts, most of the items are manufactured
 High speed cam dobby, electronic dobby and jacquard not manufactured
 Testing Equipments: At par with international standards- very limited
imports
 Other Items Not Manufactured:
 High speed Garment making machinery & Knitting machinery
 Machinery for technical textiles and Non-Woven and Embroidery
machinery
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COMPARISON WITH CHINA
Parameters
Chinese Textile Industry
Indian Textile Industry
Installed Spindleage
105 million (up to 2008-09)
38 million (32 million
working)
Shuttleless Looms
7.20 lac
1.20 lac
Total textile production
Above US$ 650.00 bn
Approx. US$ 65.00 bn
Export
US$ 147 bn
US$ 22 - 24 bn
Textile Machinery
Production by Industry
Rs. 550.0 bn (in 2007-08)
Rs. 58.0 bn (Reduced now)
Import of 2nd Hand
Machinery
Prohibited
Freely permitted
Technology Level of
produced textile machines
Entire range of High Tech
Machineries are produced (due
to JVs & FDI)
Very Strong in Ginning &
Spinning Machineries
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TEI – RETARDATION OF GROWTH
 Reasons:
 Unhealthy condition of the domestic textile industry
 Inconsistent Govt. policies - discontinuation of TUFS from time to time
 Weaving sector suffered periodically due to bad market condition
affecting the domestic machinery manufacturers. Other reasons are
 Import of 2nd hand cheaper shuttleless looms for modernization at ‘0’ duty
 Unrestricted import of old looms in large quantities - manipulation of vintage
 Duty Structure – no protection of domestic industry-no Level playing fieldsame technology Chinese looms cheaper by almost 10%
 Few manufacturers of spinning, weaving and processing have either
set up manufacturing facility or tie ups in China, others may follow
 No R&D support and TUF scheme for the TEI with interest subvention
to achieve the long term goal
 One foreign collaboration for shuttleless Rapier loom is struggling to
survive - no adequate order
 No FDI in weaving sector
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TEI - RECOMMENDATIONS
1. Excise Duty
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Excise duty on all items of textile machinery, parts, components & accessories in general
be at 8% from 12% , there should be no exemption.
Excise duty on all specified machinery and parts, components & accessories of the textile
machinery in general should be 8% from 6%.
The uniform rate would help the Textile Engineering Industry to be more competitive as
they would be able to rationalise their production programme and the cost reduction
would be possible. Managing different rates of duty for different end product is difficult.
2. Custom Duty
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Nil duty on the critical parts, components and accessories
Uniform rate of duty for all items is required.
Restrict the reduction of import duty (nil duty) for high tech shuttleless looms such as
Rapier, Airjet and Waterjet looms with speeds above 350, 700, and 650 rpm respectively.
Remove Condition No. 5 for import of components under nil duty for manufacture of
shuttleless looms should be done away with. Because when the shuttleless loom is
imported, the exemption of duty (5%) on the complete value of the machine is much
higher than that on the components (costing 30% - 40% of the total value of the machine)
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POLICY MATTERS - SUGGESTIONS
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Supply of local textile machinery to units under EPCG and EOU status
should be treated at par.
200% weighted deduction on R&D expenditure should be allowed to all
types of companies and partnership/ proprietary units.
Tax break for 5 yrs for any unit manufacturing hi-tech item of textile
machinery with or without foreign collaboration.
Subsidy on imported textile machinery in 2ND hand condition under the
TUF Scheme and, 20% & 15% CLC Schemes should be stopped.
200% weighted deduction on expenditures made by the MSMEs and others
on Skill Development, Technology development etc.
A modernization/ TUF for TEI with interest subvention (5%) and/ or
margin money subsidy (20%) is an urgent need specifically for MSMEs.
Infrastructure development for TEI and for CG sector by providing CFCs with
sufficient Government grants.
Removal of benchmarking process under TUF scheme or creation of a level
playing field for Indian manufacturers
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FTA - SUGGESTIONS
FTAs need to be entered into with detailed analysis of the
cost benefit ratio for the domestic industry
1.
2.
3.
4.
Will the domestic industry be benefited out of the FTA or incur loss?
If there is benefit for the domestic industry how it is worked out?
What is the % of benefit being extended to the FTA country and why?
The products for which The FTA is claimed by the FTA country is it being
produced now or they propose to produce in future? There should not be
any backdoor entry by other country.
5. Whether domestic manufacturers are producing the same product and
already exporting to the FTA country?
6. If so, whether FTA country will allow zero duty for such exports?
7. Unless the respective Ministries are ready with positive answers to these
questions, no FTA proposals should be made by them?
We need not to be good to other countries affecting our own
country adversely. There should not be any rush for FTAs.
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Thank You
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