India's draft fiber policy seeks to eliminate the tax difference between cotton and man-made fiber. A senior official said that the Indian Ministry of textiles will soon submit a draft national fiber policy to the government cabinet, which will put the tax rate of cotton and man-made fiber at the same level
Rita Menon, textile minister, said, "we will submit the draft to the cabinet soon, but of course, we will wait until next month."
in the draft policy, the Ministry of textiles expressed concern about "historical differences in the tax rates of man-made fibers and cotton"
although the consumption tax on cotton has been abolished, the tax burden on man-made fiber is 8%. This differential treatment is more obvious in the value chain
man made fiber textiles have 8% tax burden, but cotton textiles have 4% optional tax burden
the open policy draft says that as long as the consumption tax on man-made fibers and man-made fiber textiles is reduced, it can have a positive impact on man-made fiber consumption
the draft said: "given that the future demand will be mainly based on textiles dominated by man-made fibers, special attention should be paid to promoting the consumption and production of man-made fibers in India."
the Indian textile industry is worth US $63billion, and the proportion of fiber consumption of man-made fiber is 41%, while the proportion of cotton is 51%. In contrast, the global consumption of man-made fiber for cotton has increased, and the proportion of rapid integration at home and abroad is 60:40
the draft policy says that the global fiber consumption will no longer charge fees from the fourth policy year, and the trend may continue to favor man-made fibers, because the growth of global cotton production will be limited due to the limited land for cotton cultivation
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