The Indian textile industry looks forward to new financial allocation in Union Budget

Indian textiles industry is expecting the Union Budget 2020-21 to be more focused with new financial allocations to strengthen the sector, especially the MSME segment. Union finance minister Nirmala Sitharaman is scheduled to present Budget in Parliament on February 1 at a time when consumer demand is down and GDP growth rate has also fallen.

Focus on cotton textile segment, brining all textile products under Remission of Duties or Taxes on Export Product (RoDTEP), new schemes to benefit local manufacturers, especially MSMEs, and giving a boost to greener production are among the wish list of textile industry for the upcoming Budget.

The cotton sector is the second most developed sector in the textile industry, with cotton yarn and fabrics exports accounting for about 23 per cent of India’s total textiles and apparel exports.

However, exports of cotton textiles are declining drastically according to Ujwal Lahoti, executive chairman of Lahoti Overseas Ltd. “Cotton yarn exports declined by over 30 per cent year-on-year. The situation on cotton textiles exports front is now gloomy, so we need support from the Government on this matter.”

“A new scheme RoDTEP was supposed to go into effect from January 1, 2020, but it is yet to be implemented. We urge the government to include all textile products across the board under this umbrella scheme, which will further restore India’s share in global markets,” Lahoti.

Though the Government is promoting indigenous comprehensive capabilities, more needs to be done in the sector, feels Smarth Bansal, DGM-Product Management, ColorJet. “We expect the government to empower indigenous manufacturers by training them with all-inclusive skills. Although, there are schemes like Amended Technology Upgradation Fund Scheme (ATUFS) and Export Promotion Capital Goods (EPCG), more needs to be done for the local manufacturers to help them better compete with their international counterparts, especially in China.”

The Indian textile industry is set to be valued at $250 billion by end of the year 2020 and with a unified trajectory the sector can propelled further to new heights. Simultaneously, the industry is marching towards greener production in terms of sustainable products manufactured with green energy. “Expectation of consumers is growing with the products they purchase. Manufacturing everything green with continuous upgraded fashion requirement needs capacities to produce multiple products under one roof, which is possible only with MSME units. Due to the current slowdown, MSME’s have reduced their production capacities and are struggling to survive. Hence, the government needs to focus not just only in-terms of offering incentives but making sure, they are being delivered in time to the right industry,” says Akhilesh Taparia, CEO, Go Green Textiles India.

“Focus on MSMEs will generate immediate employment opportunities and will surely contribute in improving India’s economic condition,” adds Taparia.

Courtesy: Textile Value Chain