Textile industry pitches lowering excise duty and change in labour laws in Budget

The textile industry, which is the country’s second largest employer after agriculture, contributes nearly 14 per cent to industrial production and 4 per cent to the GDP has pitched for incentives such as lowering excise duty on man-made fibre and filament by half and changes in labour laws in the budget for next financial year.

The textiles industry has demanded better market access to major markets like the US and EU via trade pacts to help realize its untapped potential.

Confederation of Indian Textile Industry (CITI) Secretary General Binoy Job said that the textile sector can provide jobs to unskilled labourers and women as well, even in rural areas, if government provides support in the form of higher market access, changes in labour laws and opportunities to scale up.

CITI said in its pre-budget memorandum that by halving the excise duty from 12 percent to 6 percent would certainly reduce the tax burden on MMF reducing its cost to the weaver.

In India cotton consumption dominates with 65 percent and Man-made Fibre and Filament (MMF) at 35 per cent. The main reasons for lower consumption of MMF in India is higher cost which could be as a result of manufacturing cost, excise duty and oligopolistic market situation.

The need for reduction in excise duty is established and therefore it should be given serious consideration.

Further, as there is no much access to major markets like the US and European Union, to address this issue, Government should conclude free trade agreement with EU at the earliest and put in place a similar arrangement with US.

Government should also bring substantial changes in labour laws and make them more flexible. It will give the textile industry an opportunity to scale up.

The Union Budget for 2016-17 will be presented on February 29.