The Indian textile sector is set to benefit from the government’s priorities outlined in the budget 2023. The budget indicates the government’s commitment to enhancing the textile sector’s competitiveness, employment opportunities, and exports.
The government has set aside substantial funds for the textile industry, including Rs. 10,000 crore for the production-linked incentive (PLI) scheme for textiles, Rs. 500 crore for the Indian Technical Textiles Mission, and Rs. 1,000 crore for the National Technical Textiles Mission. These measures are expected to boost the sector’s production and exports, as well as create more employment opportunities for people in the country.
In addition, the government has announced several other initiatives to support the textile sector, including establishing mega textile parks, providing infrastructure development support, increasing support for the Handloom sector, and supporting the growth of the jute sector.
The textile sector is a significant contributor to India’s economy, and the government’s focus on it in the 2023-24 budget is expected to have a positive impact on the sector’s growth and development. The government’s commitment to the textile sector’s development is also in line with its goal of making India a global manufacturing hub and boosting its exports.
Issues and concerns
- Exports have slowed amid downturn in global demand
- Domestic demand also tepid amid a rural sluggishness
- Industry expects cotton shortage
Government support
- Rs 10,683 cr Production Linked Incentive scheme in place
- Man Made Fibre (MMF), garments, technical textiles focus areas
- 7 PM Mega Integrated Textile Region & Apparel Parks planned
- MITRA scheme providing complete value chain support for textile
- $100 billion export target by 2030
- Incentive scheme for textile value chain
- Cotton Price Stabilisation Fund Scheme to push exports
- Replace Technology Upgradation Fund Scheme with PLI type plan
- Issue claims for 40,000 pending cases in ATUFS
Tax expectations
- Remove 11% import duty on cotton, and cotton waste to remain competitive against Bangladesh
- Retain 5% import duty on all types of textile machinery; 5% import duty till March 31, 2023, 7.5% thereafter
- Increase basic customs duty on imports of MMF Yarn to 10% from 5%
- Restore duty-free imports facility against madeups exports
- Cover cotton yarn exports under 3% interest equalization scheme
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