Textile boost: Govt eyes use of technical textiles mandatory in these many areas, to bring new HSN codes

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Updated: August 29, 2019 8:23 PM

The government is in the process of finalizing 40 new Harmonized System of Nomenclature (HSN) codes for technical textiles sector in coming months.

HSN code is a globally accepted product description and coding system. (Reuters)

The government on Thursday said that it is in the process of finalizing 40 new Harmonized System of Nomenclature (HSN) codes for technical textiles sector in coming months even as it has already set up HSN codes for 207 items. “Another list of 40 such HSN codes have been under consideration and in the next few months we will have dedicated codes for 40 such items,” Ravi Capoor, secretary, Ministry of Textiles said. “It is a great beginning because technical textile applications are very physical such as defence, medical, fire retardant, roads, railways, infrastructure etc. For example, bullet-proof jackets are made of ‘Kevlar’ fabric with certain standards which if not met can let bullet penetrate the fabric. So standards are very critical for manufacturing of technical textiles,” T.K. Sengupta, President, The Textiles Association (India) told Financial Express Online.

HSN code is a globally accepted product description and coding system. The minister, speaking at an industry event, also stressed on the government’s plans to make use of technical textiles in over 90 areas mandatory. Technical textiles is a “sunrise industry” and there is a need for an ecosystem for time-bound research in the institutions for technical textiles segment, the minister highlighted in a statement, adding that the global market size of technical textiles is around $200-250 billion with a ‘very high’ CAGR. However, India lags with respect to the annual growth rate of the sector.

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The development comes amid the slowdown in demand in textiles that is putting the survival of its MSMEs in jeopardy. “The textiles industry is going down for the last 1.5-2 years performing well below its capacity but the government is not bothered about it. Since there is very poor demand, MSMEs are finding it tough to survive and curtailing their workforce. In such case, skill development is the secondary thing,” Sengupta had said earlier.

The industry currently has a gap of 16 lakh trained skilled workers, Capoor had said earlier this month even as the Cabinet Committee on Economic Affairs had approved the formation of Samarth from FY18 to FY20 called as a “placement oriented programme” for meeting the skill requirements of the textiles sector. The scheme has targeted training 10 lakh youth by 2020 across spinning and weaving in the organized sector, with a projected outlay of Rs 1300 crore.

Moreover, the disparity in GST rates has also been irking the sector. “Prices for making cotton yarn is higher due to which those buying yarn and making fabric are finding it very expensive. So there is poor demand. GST is 18 per cent for synthetic fibre and when the yarn is made the GST is 12 per cent while for making fabric it is 5 per cent. So there is the abnormality of GST,” Sengupta had said adding that $16-17 billion worth annual garment exports of India are lower than countries like Bangladesh that exports garments worth $30 billion.

Nonetheless, Dr V K Saraswat, Member, NITI Aayog stressed on having an umbrella organization for better coordination between the industry, R&D centres and government.

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