India Budget 2024-25: Mixed reactions from textile industry

Ashish Gujarati, former president of the Southern Gujarat Chamber of Commerce & Industry (SGCCI), highlighted several encouraging aspects. “The skilling incentive will help the textile industry. An incentive of ₹3,000 (~$35.84) per month per worker is welcomed. The enhanced credit guarantee scheme limit will boost investment in textiles,” he stated. Gujarati also appreciated the reduction in duty on raw spandex yarn from 7.5 per cent to 5 per cent.

However, the budget has faced criticism for not addressing some critical needs of the textile sector. R K Vij, emeritus president of the Textile Association of India (TAI) and secretary general of the Polyester Textile and Apparel Industry Association (PTAIA), expressed his disappointment, saying, “There’s nothing in textile. Only spandex custom duty reduced from 7.5 per cent to 5.0 per cent.”

Gujarati echoed this sentiment, adding, “The whole of the textile industry is going through a distress phase. Textile generates the second-highest employment after agriculture. In this budget, the agriculture sector has been given support, which is welcomed, but the textile industry is ignored, which is a matter of disappointment. Moreoever, no incentive scheme for textile micro, small and medium enterprises (MSMEs) has been declared, which is disappointing.”

Jaikrishna Pathak, President of the Bombay Yarn Merchants Association, viewed the reduction in basic customs duty (BCD) subject to conditions on methylene diphenyl diisocyanate (MDI) for manufacturing of spandex yarn positively. "It is positive for yarn stocks,” he said.

Sanjay K Jain, ICC National Committee chairman and MD of TT Limited, pointed out the benefits for the garment sector. "The budget provisions for giving PF relief to employers and employees and the focus on skilling will definitely help the textile and garment industry, more specifically the garment industry, as it is a labour-intensive industry," Jain said.

The Tiruppur Exporters' Association (TEA) president, K M Subramaniam, praised the budget for its favourable measures, saying "The change in the personal tax structure under the new regime is a good thing for Tiruppur. They have taken the top 500 companies and are providing subsidies for fresh employees. These two things are very attractive for businesses."

KV Srinivasan, executive director and CEO, Profectus Capital Pvt Ltd, said "This budget is a bonanza for MSMEs. Measures like vastly enhanced Credit Guarantees up to ₹100 crore (~$11.95 million) and an increase in MUDRA limits should facilitate capital expenditure for the expansion and modernisation of MSMEs in the manufacturing sector. Wider coverage of TReDS and credit for MSMEs in the early stage of stress should help them manage working capital and cut cash flow cycles. Abolishing Angel tax is another welcome measure that would help bring more foreign direct investment (FDI) into the start-up sector. The availability of well-trained manpower and providing formal employment to them has been a serious challenge faced by MSMEs. EPF subsidy and measures for skill enhancement should make this task easier. All in all, it is a very MSME-friendly budget."

Fibre2Fashion News Desk (KD)