Surat textile traders eye Nepal.

SURAT: Textile traders in the country's biggest man-made fabric (MMF) sector in the city have set their eyes on Nepal. For the first time, the traders have decided to penetrate deep into the neighbouring SAARC country as a large number of textile factories in Nepal have either closed down or are on the verge of closure due to labour unrest, high taxes, unclear government policies etc.

Office-bearers of the Federation of Surat Textile Traders Association (FOSTTA) are planning to visit Nepal to explore opportunities to increase the textile trade. They would be meeting the government authorities, demanding reduction in customs and VAT duties charged by the Nepal government on imports of polyester fabric from India.

Market sources said that ambassador of Nepal, Jenisha Bhatrai had visited the textile city last week and met leaders of textile industry, including the Southern Gujarat Chamber of Commerce and Industry (SGCCI). The Nepalese ambassador was given the overview about the city's textile trade in the man-made fabric field. She requested the traders to increase their business ties with their Nepalese counterparts.

Devkishan Manghani, office-bearer of FOSTTA, told TOI, "Nepal is the important destination as far as the polyester fabrics consumption is concerned. Nepal's textile sector, which is mostly cotton and synthetic based, is passing through a tough phase as many factories have closed down in the past couple of years. This is the right time for us to tap the Nepalese market."

According to Manghani, import duty structure in Nepal is not conducive for the textile traders from Surat. "Polyester fabric exports to Nepal attract customs duty and VAT in the excess of 32%. Against this, Nepal has provided tax relief to the fabrics and garments exported by China which attract only 17% duty," he added.

Around Rs 1,200 crore worth of fabric is exported from Surat to various destinations including the UAE, the US, Europe etc. None of the exporters are ready to export fabrics to Nepal due to the high duty structure.

Champalal Bothra, secretary, FOSTTA said, "There is a huge potential in Nepal provided the government gives some tax relief and makes the structure at par with that being offered to China."

Source : timesofindia.indiatimes.com