The Confederation of Indian Weaving Industry (CIWI), a body representing fabric producers in the decentralised powerloom sector, has said that the Government's decision to extend the levy of excise duty on non-branded garments would hurt the fabric producers in the decentralised powerloom sector.

Since the bulk of fabrics produced by the powerloom industry goes to big garment manufacturers, the imposition of 16 per cent excise levy on non-branded garments would only backfire on the former, as there would be lesser uptake from the weaving industry due to the levy, CIWI's chairman M.S. Mathivanan said.

The introduction of new levy on garment units would make Indian garment prices expensive vis-a-vis those imported from other countries. It was unfortunate that the levy should come at a time when the country was experiencing heavy inflow of garment imports, he said, and urged the Centre to reconsider its decision to levy excise on non-branded garments.

He felt the amendments made in the Finance Bill 2001 leading to exemption of countervailing duty (CVD) on looms would make the TUF scheme now attractive to the weavers who could not benefit much out of it earlier due to high duty rates and restrictions. Now the powerloom weavers would be able to import looms by taking advantage of both the CVD exemption and the lower import duty give in the earlier Budget proposal.