NEW DELHI: The FM’s budget has delivered for textile sector, as the sops will help to boost domestic and export demand for the textiles companies of the country due to the reduction in excise and customs duty, sources said here on February 28.
However to take off a part of TUF, companies will need to have large equity base to leverage the ratio.
The proposed technology park scheme will attract international vendors to outsource their manufacturing to the country and the target of $50 billion in exports in the year 2010 now seems practical.
Further Dipen Sanghvee of Pranav Securities feels that the FM has not done much for the cotton textiles manufacturers, as the duty structure on this sector remains unchanged however, excise duty cut on man-made fibre, MMF and man made filament from 16 pct to 8 pct will help boost domestic demand.
Also the customs duty on all these raw materials like PTA, DMT, MEG and has been cut from 15 pct to 10 pct thus reducing the input costs of these companies.
Further the budget will make country’s MMFs competitive on the price front vis-a-vis China and help increase export earnings of textiles companies in the country. Vivek Kumar of Karvy Stock Broking said the reduction in the excise duty as well as customs duty in man-made fibre will make it competitive with the cotton textile industries.