The production of polyester fabric in the country’s largest man-made fabric (MMF) hub of Surat has decreased by 40 per cent from 13,000 mtr tonne (MT) to 7,500 MT per annum after the Central Government imposed the goods and service tax (GST) in 2016, according to the textile committee of the Southern Gujarat Chamber of Commerce and Industry (SGCCI).
An SGCCI report said the higher cost of raw material, including yarn, is posing a major challenge to the MMF sector. Adding to the problem is the import of cheap fabrics from China, Bangladesh and other Asian nations.
The quantum of investment in the MMF sector has significantly reduced under the Amended Technology Upgradation Fund (ATUF) scheme due to the drastic cut in subsidy provided by the Central Government. About seven approved projects under the Group Workshed Scheme (GWS) have backed out due to the reduction in subsidy under ATUF.
Restoration of 30 per cent subsidy under the ATUF scheme is needed to maintain modernisation in the MMF sector, according to experts. The committee has submitted the report to Textiles Minister Smriti Irani seeking her intervention.