The new budget proposal continues the zero import duty on cotton and the 25 percent import duty on cotton waste and yarn. While these duties were earlier listed as exceptions, they are now incorporated into the tariff schedule. The budget also levies a 2 percent surcharge on all items with duties in excess of zero. While CVD's on cotton and cotton waste are zero, a five percent CVD is charged on cotton sewing thread. The CVD on cotton yarn has been reduced from 20 to 18 percent.
Items imported under various duty drawback programs are duty free.
Import duties on inputs to the textile industry such as dyes, pigments, paints and varnishes, glues, enzymes, and modified starches are reduced from 40 percent to 30 percent. To boost efficiency and make textile mills more competitive before quantitative restrictions are dismantled under the Multifiber Arrangement, import duties on components and parts of textile machinery are lowered to 10 percent. While duty on most fibers remains unchanged, import duty on wool is lowered from 25 to 20 percent and on acetate and flax from 30 to 20 percent. Indonesia Indonesian textile exports continue to grow in volume and value, despite the increase in price due to rising production costs. Achieving the goal may prove to be a challenge to the textile sector which is faced with high production costs and equipped with outdated machinery.