Textile industry wants draft fibre policy reworked

It took a year and eight working groups for the Union textile ministry to come up with an initial draft of a National Fibre Policy (NFB). However, the industry does not seem impressed.

Many said the draft lacked focus and was an aggregation of recommendations which appeared conflicting. “There seems to be lack of direction and the definition and purpose of the policy is totally jumbled in the draft. It will need a lot of work and in its current form, it is essentially nothing,” said the managing director of an integrated textile manufacturing company, on condition of anonymity.

Though initial feedback did applaud the work the ministry had done, industry feels the first draft dwells on micro issues instead of providing a general policy direction to the industry.

The NFB has been an old demand. It was envisioned to create an environment in which the various sections, particularly cotton and man-made fibres, could access adequately priced fibre through the year. The need arose due to the increased dependence of the Indian textile industry on cotton, as the man-made fibre industry lagged, contrary to the situation prevailing globally.

“The initial draft does not seem to promise a viable policy. It’s too specific and in many places, contradictory. The policy is trying to deal with everything and there are very few recommendations that can actually be good for the industry as a whole,” said another industry representative.

Many felt the policy was nothing but an incentive wish list. “Too much importance has been given to incentives in the draft policy. Incentives are only an aid to policy efficiency and are not a policy in itself. In fact, the document seems to be an incentive wish list,” said K Rangarajan, head of the Kolkata centre of the Indian institute of Foreign trade.

Some key recommendations facing criticism include increasing the hank yarn obligation of mills, restriction in availability of funds under the technology upgradation scheme for the spinning industry, the recommendation to remove special additional duty on import of man-made fibre and imposition of duty on export of cotton yarn.

While the opposition to hank yarn obligation is not new, the Northern India Textile Mills Association has labeled the imposition of a duty on yarn exports a “retrograde policy” which would significantly harm the spinning industry. While this recommendation might find supporters among end-users and apparel exporters, experts say these measures might be counterproductive for the overall industry.

Also, say sritics,the draft policy has listed recommendations within the purview of state governments and other ministries. As a result, it might not adhere to its original objective of providing abundant and adequately priced fibre to all sections of the industry.

Other major recommendations include measures to improve textile infrastructure, improving the quality of cotton fibre and enhancing research facilities and setting up an advisory council on man-made fibre to monitor excise duties passed on by manufacturers to consumers. Another is to exempt the textile industry from the Goods and Services Tax for at least two years, to enhance competitiveness.