Daijiworld Media Network- New Delhi
New Delhi, Jan 30: The textile industry, a key pillar of India’s economy, has high expectations from the upcoming Budget, seeking policy support to address pressing challenges. Contributing nearly 4% to the country’s GDP, 13% to industrial production, and 8% to total merchandise exports, the sector remains India’s largest industrial employer, providing direct employment to 4.5 cr people.
Industry leaders are calling for simplified compliance processes, incentives for sustainable and digital initiatives, and enhanced support for MSMEs and startups to strengthen the sector.
One of the key concerns is the high cost of Indian cotton following the 11% customs duty imposed on cotton imports in 2021. According to the Northern India Textile Mills Association (NITMA), this has widened the gap between domestic and international cotton prices, making cotton spinning operations unviable in India. With international cotton prices consistently lower over the past two years, the industry is urging the government to abolish the customs duty on cotton imports and allow duty-free procurement to mitigate the financial strain on domestic manufacturers.
Another major challenge faced by the textile industry is the rampant under-invoicing of knitted fabrics, especially from China. Industry estimates suggest that this malpractice results in an annual revenue loss of nearly ?5,000 crore to the exchequer, while also causing severe damage to domestic textile businesses. The industry has expressed concerns over the rise of a parallel economy due to the large-scale sale of undervalued imports and has urged the government to implement a permanent solution to curb under-invoicing.
The RoDTEP (Remission of Duties and Taxes on Exported Products) scheme, which has been extended until September 30 under the Advance Authorisation scheme until December 31, 2024, is another key focus for industry stakeholders. To meet the ambitious target of USD 350 billion in total revenue by 2030, including USD 100 billion in textile exports, the industry is advocating for an extension of the RoDTEP scheme until September 2025 and the restoration of RoDTEP rates for textile products.
At present, the Production-Linked Incentive (PLI) scheme applies exclusively to synthetic fibres. However, industry representatives argue that PLI benefits should be extended to the entire textile sector, including cotton-based products, to encourage investment and promote overall growth.
With the Budget around the corner, textile manufacturers and industry associations are hopeful that their demands will be met, ensuring sustainable growth and competitiveness in the global market.