Textile Associations have conveyed mixed reactions on the announcements made in the Union budget.
Coimbatore: Indian Texpreneurs Federation (ITF) Convener, D Prabhu stated that,"We welcome the thrust given to the Textile Sector in the budget with an announcement of 7 Mega Integrated Textile Region and Apparel Parks (MITRA).
With the concept of these mega parks, Indian Textile and a Apparel Sector particularly Small and Micro Enterprises can work on scale and build competitiveness in manufacturing.
Further these parks can be aligned with Environmental, Social and Governance (ESG) goals to attract international buyers as well as investors.
The Mention of 3 year time period is a welcome one to capitalise the opportunities emerging from brands China plus one strategy.
TamilNadu with a robust manufacturing eco system should work towards getting 2 parks. Reducing the BCD rates on nylon also will help the MMF sector in a big way."He said.
The Southern India Mills Association (SIMA) President, Ashwin Chandran said,"We have appealed the Prime Minister to immediately withdraw the levy of 10% import duty on cotton and cotton waste to sustain the global competitiveness of Indian textiles & apparel industry and prevent job losses for several lakhs of people, prevent fall in the exports and also curb cheaper imports of value added products from the SAFTA countries like Bangladesh, Sri Lanka, etc."
"Levy of 10% duty will not benefit the cotton farmers as the normal import of 12 to 14 lakh bales per year accounts only around 3% of Indian cotton production and consumption and such cotton is not produced in India. But this is essential to sustain the share of value added markets of India both in global and domestic markets. After the introduction of BT cotton that accounts over 97% of the cotton produced in the country, the cotton textile industry has to import ELS cotton, organic cotton, contamination free cotton to the tune of 10 to 12 lakhs bales per year to meet the demands of the global customers and also the value added made-ups and apparel segments of domestic market."
He then cautioned that the country is already flooded with cheaper imports of readymade garments from SAFTA countries and is under crisis.
"We welcome the government policy of making any raw material available at a competitive rate by removing the anti-dumping and other import duties. The sudden announcement of levying import duty on cotton has come as a rude shock for the industry that is just coming out of the ill effects of COVID-19."
"GST is also defeated with this levy as the cotton value chain attracts 5% GST and will add the cost to the customers and discourage value addition. MMF textile value chain’s growth was curtailed due to import parity pricing policy being adopted by the indigenous fibre manufacturers during the two decades and the recent removal of ADD on PTA has created a level playing field for the polyester segment. He has feared that the multinational cotton traders and the major traders would adopt the same model and the competitiveness of predominantly MSME based cotton textiles & apparel industry will be affected."
"MSME and the decentralized nature of the yarn, fabric and garment manufacturers in the country will not be in a position to take advantage of the Advance Authorization Scheme and such scheme would benefit only the vertically integrated units that account less than 10% of the exports."
"The Government had withdrawn the import duty on cotton during July 2008 consequent to the severe recession faced by the industry and also a Nation-wide bandh by the entire cotton textile value chain. When the import duty was there, the multinationals used to cover major volumes of cotton and export and thereafter the industry had to import cotton at higher price and thereby the foreign exchange also got affected."
"We urge the Prime Minister to withdraw the 5% BCD and 5% AIDC and also 10% BCD on cotton waste to sustain the global competition of the cotton textile value chain and make Aatmanirbar Bharat vision a reality."
SIMA Chairman then thanked the Government for announcing the Production Linked Incentive Scheme by allocating Rs.1.97 lakh crores including Rs.10,683 crores for textile industry, giving thrust to develop the global competitiveness in the MMF textile value chain.
He then stated that the focus product incentive scheme under PLI Scheme for MMF and technical textiles would give enormous opportunity for the growth of Indian MMF and technical textile products.
"Announcement of MITRA scheme aiming at developing seven mega textile parks with plug and play facilities that can facilitate 40 to 50 leading textile players to become global champions. Tamilnadu being the largest textile manufacturing state in India, is planning to develop 3 mega parks under MITRA, Andhra Pradesh and Telangana State are already having one such park each.
This would facilitate attracting large scale investments including FDI and JV's. While welcoming the allocation of Rs.700 crores for TUF Scheme and Rs.80 crores for SITP."
SIMA Chairman hoped for the additional allocations would be made liberally based on the claims filed by the Ministry of Textiles."
"There is a backlog of over Rs.10,000 crores under TUFS for several years and hoped that the Government would release the same during the financial year 2021-22 to enable the industry to make investments and create jobs under different Schemes."He said.