The textile and apparel industry in India has high hopes that the upcoming interim budget will bring much-needed tax incentives and improved textile infrastructure. The Apparel Export Promotion Council (AEPC) has put forth pre-budget proposals, calling for tax concessions to be provided to apparel manufacturers adhering to ESG (Environmental, Social, and Governance) and other international quality standards.
As an integral part of India’s economy, the textile and apparel industry currently contributes around 2.3% to the GDP, 13% to industrial production, and 12% to exports, according to Invest India. Moreover, it is the second largest employer in the country, providing jobs to approximately 45 million people directly and 100 million in allied industries.
The AEPC is also advocating for trimmings and embellishments to be included under the Import of Goods at Concessional Rates of Duty Rules (IGCR Rules). Presently, certain trims and embellishments are not permitted and thus not eligible for duty exemption.
This restriction poses challenges for Indian apparel exporters, as foreign buyers require consistency and quality, and deviations can lead to shipment rejections. Currently, these trimmings and embellishments must be sourced from overseas suppliers nominated by the garment buyers.
Industry experts agree with the AEPC’s recommendations, emphasising the urgency of measures that support sector growth and address key challenges.
KK Lalpuria, Executive Director and CEO of Indo Count Industries believes that stabilising raw material prices, strengthening supply chains, and improving textile infrastructure are essential for business empowerment, contributing to the nation’s economy.
A recent report by CII and Primus Partners suggests that the textile industry’s contribution to GDP is set to double from 2.3% to 5% by the end of the decade. Therefore, providing budgetary incentives that enhance the sector’s competitiveness will be crucial to maintain this growth momentum. The industry eagerly awaits the interim budget’s announcements, hoping for measures that will consolidate its position in the Indian economy and foster a strong and sustainable future.
