February 6, 2015: The MSME ministry has suggested that the inverted tax duty structure should be removed so that the interests of domestic coir industry can be protected. This came in response to the concerns over countries like China importing coir raw material from India and exporting finished products to other countries. The ministry has proposed to introduce a Technology Upgradation Fund (TUF) like scheme for the coir sector and also wants the funds for the ministry to be doubled, which is at Rs 680 million right now.
“The inverted duty structure which is favouring exporters of raw material should be re-examined. Natural fibre exports should be not be promoted, that may reduce exports a little bit, but that will make raw material available for local industry,” coir board chairman and joint secretary in the MSME ministry SN Tripathi told PTI.
Under the inverted duty structure, the tax rates of the finished products are lower than the raw materials. Tripathi also revealed that the ministry has suggested these measures to its finance counterpart for consideration in the upcoming budget.
The coir industry is primarily based in Kerala and employs 0.375 million labourers, out of which 90 per cent are women. However, these numbers have been declining over the years owing to factors like low wages and little modernisation.
