The Global Trade Research Initiative (GTRI) is urging the Indian government to evaluate schemes like the Production Linked Incentive (PLI) scheme and PM Mega Integrated Textile Region and Apparel (PM MITRA) for the textile industry. Despite a decrease in India’s textile and garment exports in 2023 compared to 2015 levels, countries like Bangladesh and Vietnam have surpassed India due to their focus on value addition through innovation and new techniques. GTRI recommends promoting value addition to improve India’s competitiveness in the global textile market.
GTRI identified critical issues across ten key government ministries in India, crucial for driving economic growth. The report emphasized the urgency of comprehensive economic reforms as the country enters a transformative era with the potential for significant change.
The Global Textiles and Garments Research Institute (GTRI) warned that India’s position in the global textiles and garments market is at risk without urgent reforms. The organization pointed out a decline in India’s competitiveness and suggested that the current Production Linked Incentive (PLI) for textiles should be reevaluated. GTRI emphasized the importance of promoting value addition, innovation, advanced manufacturing techniques, and branding to enhance India’s presence in the global textile market.
GTRI recommended strategic reforms for sustainable development and inclusive growth, urging the new government to simplify the outdated customs duty structure affecting $680 billion in imports. The current system, with over 27 duty rates and over 100 different slabs, has not been reviewed in 20 years. The majority of customs duty revenue comes from a small percentage of tariff lines, while many contribute very little. By reducing the average import tariff from 18.1% to below 10%, important products can be protected. Simplification is crucial to avoid global criticism, exemplified by Trump criticizing India as the “tariff king.”
GTRI recommended raising the GST exemption limit for firms’ annual turnover to ₹15 million from ₹4 million. This move would benefit India’s MSME sector, encouraging job creation and growth. Currently, firms with turnover under ₹1.5 crore comprise over 80% of registrations but contribute less than 7% of tax collected. The proposed increase would reduce the GST system’s taxpayer load significantly, allowing for improved compliance measures and addressing tax evasion. The expected increase in tax collection would help offset any potential loss from the higher exemption limit.
