India to boost modernization of the textile industry, Finance Minister P Chidambaram in his Interim Budget 2014-2015 has proposed reduction in the excise duty on textile machinery from 12 percent to 10 percent. It covers all goods falling under falling under chapter 84 and chapter 85 of the Schedule to the Central Excise Tariff Act for the period up to 30.6.2014. However, the Minister added that the rates can be reviewed at the time of the regular Budget, which would be presented by the new Government that takes office after the scheduled General Elections later this year.

Apart from reduction in excise duty by 2 percent on textile machinery, it has also increased the allocation under the Technology Upgradation Fund Scheme (TUFS) to Rs. 24 billion for 2014-15 from Rs. 19.56 billion in the ongoing fiscal year.

Mr. Rajendran, CFO of Lakshmi Machine Works (LMW) has welcomed the decision to reduce excise duty on textile machinery, although it will give only a small push to the industry.

India is looking ahead to see modernization in the textile industry, where most of the textile companies having old machinery making using of the TUFS will go for replacement and increase their production capacity.