COIMBATORE: The Southern India Mills' Association has urged the Centre to increase the customs duty on synthetic spun yarn. During this year, imports have become cheaper owing to the rupee appreciation.
The Centre has reduced the customs duty on manmade staple fibre spun yarn from 10 per cent to five per cent, while the import duty on polyester fibre was reduced by just 2.5 per cent. This would make the synthetic spinning sector unviable.
The industry was pleading for abolition of the customs duty on manmade staple fibres. But the Government was doing it in phases. This approach did not give enough opportunities for the synthetic spinning sector to compete in the global market. And, the domestic market saw large-scale import of spun yarn from countries like China. The mills are not able to compete with the prices of imported yarn.
Despite the various schemes announced by the Government to strengthen the spinning sector, the synthetic spinning sector achieved negligible growth owing the high cost of the raw material.
The association said the customs duty on manmade yarn should be restored to 10 per cent and the customs duty on synthetic staple fibre should be abolished to revive the mills. Adding to the woes are high interest rates and a slump in the local market.