New Delhi, 23 July 2024: Sh. Rakesh Mehra, Chairman of the Confederation of Indian Textile Industry (CITI), congratulated the Hon. Minister of Finance, Shri Nirmala Sitharaman, on the presentation of her 7th Finance Budget. He described the budget as forward-thinking and addressed several important issues for the expansion of the Indian economy as a whole.
“MSME accounts for about 80% of the Indian Textile Industry,” however the textile and apparel sector’s stagnation required some audacious steps for capacity building, modernization, and cost competitiveness. Numerous MSMEs in the textile and apparel industries would benefit greatly from the credit assurance programs that were unveiled today, which will allow them to grow and innovate.
He welcomed the establishment of e-Commerce centers and was pleased that e-commerce was acknowledged as a development driver for trade. A more strong and sustainable industrial ecology will also be made possible by “plug and play” industrial parks, assistance in the establishment of working women’s hostels, and other initiatives.
The government’s move to loosen FDI regulations, along with its enhanced emphasis on skill development and the launch of the Employment Linked Incentive plan, will encourage fresh investment in the textile sector. Moreover, the government’s dedication to sustainable development is demonstrated by the funding support provided for energy programs, clean energy transitions, and energy audits. He stated, “We think that these initiatives will open the door for a more resilient and long-lasting industrial ecosystem.” The numerous advantages of lowering income taxes will also boost consumers’ spending power, which could result in higher domestic demand for the textile sector.
Although the Hon’ble Minister addressed the need to boost domestic manufacturing’s competitiveness in her speech today, according to Shri Mehra, the downstream textile industry is suffering from a lack of raw materials, both cotton and man-made fibers, at prices that are competitive internationally. Due to this, the Indian textile industry has been unable to take advantage of our distinct strength of presence throughout the value chain, which has led to an increase in value-added product imports over time.
Furthermore, the industry will not have an investment incentive program for modernization or expansion once the TUFS plan expires in March 2022. The industry needs to expand up if it is to survive, as it has been rapidly falling behind its rivals mostly because of a lack of resources. “There has been no significant announcement to address the industry’s declining competitiveness, with the exception of the enhanced PLI scheme allocation, which has been increased to Rs 45 crore from earlier Rs 5 crore,” Mr. Mehra noted. The vast majority’s investment needs have not been met by the PLI scheme. Ensuring large-scale investments will require the revival of capital subsidy schemes.
