Budget aims at boosting textile & clothing sector: NITMA

The grant to the textiles and clothing sector in Union Budget 2021-22 is ₹3,614.64 crore, which is about 10 per cent higher than the revised budget of ₹3,300 crore in 2020-21. The budget also puts emphasis on Infrastructure Development and Research & Capacity Building as the grant for these sectors has been increased by about 43.7 per cent and 77.5 per cent respectively as compared to last year. Share of these sectors in total textile and apparel budget allocation for 2021-22 stands at about 6 per cent and 10 per cent respectively, NITMA president Sanjay Garg said.

Seven textile parks are to be established over 3 years under the Mega Investment Textiles Parks (MITRA) scheme. "With the active support and cooperation of the government, the textile industry will become globally competitive, attract large investments and boost employment generation and exports in the years ahead," said Garg.

The uniform reduction of basic customs duty (BCD) rates on caprolactam, nylon chips and nylon fibre and to 5 per cent will spur textile industry, MSMEs, and exports, according to Garg.

The increase in customs duty on cotton from nil to 10 per cent and on raw silk and silk yarn from 10 per cent to 15 per cent will benefit domestic cotton and silk growers, Garg added.

Stating that the taxation changes proposed in the Budget will help and benefit MSMEs in a big way, Garg said, "Measures taken to simplify GST are praiseworthy with the hope that the government will take corrective measures to smoothen the GST further by removing anomalies such as the inverted duty structure."

He added that the custom duty policy announced has dual objectives of promoting domestic manufacturing and helping India get on to global value chain and export better.  Garg said the domestic textile industry will get easy access to raw materials and exports of value-added products, which will make textile industry globally competitive.

NITMA president, however, added that there is an urgent need of raising customs duty on man-made yarns from 5 per cent to 10 per cent, which has not been considered by the Union finance minister in her Budget.

"The man-made yarn sector is one of the largest employment generating segments within the textile industry, and it is highly capital and labour intensive industry as well. The unreasonably low-priced imports of man-made yarn into India have been causing considerable amount of injury to domestic manufacturers for the last 5 years or so. Industry has deep concerns over the rise in import quantities being dumped into India, which can potentially cause a permanent damage to domestic MMF sector with the cascading effect, from closure of units to NPAs, and eventually resulting in huge employment loss," Garg said.

Fibre2Fashion News Desk (RKS)