The textile and apparel sector in India, which employs about 11 crore people and is the second largest employer after agriculture, is primarily made up of MSME’s. The Hon. Prime Minister, Shri. Narendra Modi is leading the NDA Government, which has been making significant efforts to bolster the MSME sectors. By raising the asset value to Rs. 50 crores and the annual sales turnover to Rs. 250 crores, the eligibility criteria for MSMEs have been significantly loosened. As a result of these ground-breaking initiatives, over 80% of the nation’s textile manufacturing units are now eligible to fall under the MSME category. The industry has profited immensely from this both during and after lockdown.
Dr. S.K. Sundararaman, Chairman of the Southern India Mills’ Association (SIMA), said in a press release released today that the labor-intensive textile industry would benefit from the various announcements related to employment, skilling, and MSMEs—three major themes of the Union Budget. According to him, the extremely susceptible textile sector has been frequently under financial stress as a result of outside variables, and as a result, the industry has been requesting that the government publish a distinct plan for a credit guarantee facility. According to him, the business has been suffering from a protracted recession since April 2022. He applauded the introduction of the Credit Guarantee Scheme for MSMEs, which allows term loans up to Rs. 100 crores, subject to loan amount variation, for the purchase of machinery and equipment without the need for collateral or third-party guarantee cover. Additionally, he has applauded the system that allows MSMEs in the SMA stage to continue operating during a difficult time and prevent them from entering the NPA stage due to circumstances outside of their control.
The announcement that the BCD for Methylene Diphenyl Diisocyanate (MDI), which is used to make spandex yarn, will be lowered from 7.5% to 5% in order to address the duty inversion has been welcomed by the chairman of SIMA. This will increase the competitiveness of textile goods makers who utilize such yarn on a global scale. According to him, the use of spandex yarn has been growing rapidly, and he hoped that local producers will share this growth with the downstream industries.
The chairman of SIMA has praised the Finance Ministry’s allocations for exports, specifically RoDTEP and RoSCTL, which have increased by 5.8% and 10% for the year 2024–2024 compared to 2023–2024. This is a much-needed boost at a time when textile exports are declining as a result of a number of external causes.
The Employment Linked Incentive Scheme, which would reimburse employers’ EPFO contributions up to Rs. 3,000 per month for two years for new hires, has been praised by Dr. Sundararaman. He applauded the declaration that new hires in all formal sectors will receive a month’s salary in three installments up to Rs. 15, 000. Many announcements have been made to improve infrastructure, including ports, roads, airports, and waterways. By doing so, logistics and transaction costs will be decreased, improving the country’s competitiveness worldwide. The textile business, which mostly uses cotton, would profit from the announcement made for agriculture since it would help cotton growers raise their output and increase the area under natural farming, among other things.
The SIMA chairman claims that small traders, handloom and power loom weavers in the textile industry will profit from the raising of the MUDRA loan limit from Rs. 10 lakhs to Rs. 20 lakhs. He said that the textile industry would also profit from the introduction of 12 industrial parks with plug-and-play amenities and rental homes with dorm-style accommodations under PPP mode. According to him, the industry will advance thanks to the announcements made about energy security, innovation, R&D, and regular funding for the textile sector made available to TUF Scheme, skill development, PLI, NTTM, and PM-MITRA Park.
