SIMA Chief appeals to reject abnormal ADD on VSF

In a Press Release issued here today, Ravi Sam, Chairman, The Southern India Mills’ Association (SIMA), has appealed to the Union Finance Minister to reject the unrealistic recommendation made by DGTR and ensure the survival of MSME spinning mills, decentralized power loom and handloom sector and also the garment sector. He has stated that the ADD levy gives protection to the tune of 28% to the indigenous VSF manufacturer.

He has pointed out that the majority of the imported raw material, machinery, etc., attract only 5% to 7.5% basic customs duty while such an abnormal protection is totally unwarranted and on the contrary, this would greatly affect the entire VSF value chain. He said that over two lakh power looms in the State of Tamil Nadu had diverted to VSF fabric manufacturing and enabling value-added exports. He has pointed out that ADD levy would again make the fabric manufacturers switch over to imports which would have a serious impact on the MSME spinning mills.

Ravi Sam has said that the majority of the MSME spinning mills could blend Viscose Staple Fibre with the cotton to the tune of 10 to 15% and sustain their competitiveness which would be eroded with the recommended ADD.

SIMA Chairman has stated that the indigenous VSF fibre manufacturer is not in a position to meet the growing demands of the VSF value chain, rationing their supply and affecting the potential growth of the industry. He has added that the indigenous fibre manufacturer has been supplying the fibre only to less than 300 spinning mills, while the country has around 4000 spinning mills.

He has pointed out that any spinning mill in the country could buy any quantity of polyester staple fibre at an internationally competitive rate. After the removal of ADD on VSF, any SSI spinning unit or open-end spinning unit could also buy VSF staple fibre at an international price and cater to the needs of the handloom and power loom sector, says Ravi Sam.

With the imposition of ADD, this raw material availability would again become scarce resulting in industrial unrest. Against this background, the SIMA chairman has appealed to the Union Minister of Finance to reject the abnormal ADD rate recommended by the DGTR.