Feb 5, 2000|
Import of second hand textile machinery on anvil
The centre is looking to liberalise import of second-hand textile machinery to allow local textile manufacturers to be able to face competition post-MFA (multi fibre agreement).
Small garment manufacturers are vulnerable to quality competition at a global level, which could soon become a reality once Indian markets are opened up completely. By liberalising import of second-hand textile machinery, the government wants Indian small garment manufacturers to be able to access international quality machinery to develop world class products. Initially the government plans to allow import of second machinery that is less than 10 years old.
Given the fact that textile machinery in any case attracts 0% custom duty, liberalisation of second hand machinery could hold limited appeal. Such a move could backfire, if importers try to dump sub-standard/defective machinery, in which case the Indian market will be saddled with outdated machinery. Given the blistering pace at which R&D is growing in international markets, the impact of a 8-9 year old machine is questionable. What is also questionable is how much Indian garment manufacturers will benefit from such a move.
However, import of second hand machinery could have a positive impact on local textile machinery manufacturers who will be forced to develop superior products in order to face competition effectively.
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