The Indian fashion retail industry has been one of the most adversely impacted sectors during the coronavirus pandemic. The initial shutdown had brands and retailers reeling under tremendous loss. Even after the lockdown was lifted, the industry had to undergo a swift turnaround, adopt technology and irrevocably change the way traditional retail functioned.
As such, the entire fashion retail eco-system was looking forward for the Annual Budget 2021, in the hopes that positive policies and government support will help the sector and the millions employed by surviving these turbulent times.
The Union Budget 2021-22 presented by finance minister Nirmala Sitharaman has announced the initiation of a slew of schemes for the Indian fashion value chain and it was mostly met with warm response by industry stalwarts.
The Union Budget 2021-2022 has witnessed a 10% increase in grants for the textile and clothing sector, from ₹3,300 crores in 2021 to ₹3,164 crores. Conforming to the government’s focus on infrastructure development and research & capacity building, these sectors have seen an increase in grants by about 43.7% and 77.5%, respectively, compared to last year. The Budget also allocates ₹30 crores for export Promotion Studies, ₹100 crores for Integrated Scheme for Skill Development, as well as ₹700 crores for Amended Technology Upgradation Scheme (ATUFs) against ₹545 crores in the last one.
Production Linked Incentive Scheme (PLI)
The textile sector is one of the 10 sectors covered by the production-linked incentive (PLI) scheme aimed to help the country become self-reliant, boost manufacturing, and enhance exports. The scheme is bolstered India’s contribution to the global textile market.
The Confederation of Indian Textile Industry (CITI) has praised the steps taken by the ministry and expressed that the budget has ‘laid a strong foundation for the future growth of the textiles and clothing industry in India.’
“The PLI scheme is extended for 10 key sectors and Textile is one of them. There has been the allocation of ₹10,683 crores of the total estimated outlay of ₹1.46 lakh crores mainly for MMF & Technical Textile Segment. The objective of the scheme is to promote the building of new facilities and attract investments in the MMF sector,” stated T. Rajkumar, Chairman CITI, in a press release.
Mega Investment Textiles Parks (MITRA)
Moreover, in line with the Centre’s efforts to position India as a fully integrated, globally competitive manufacturing and exporting hub for the textile sector, the Government has proposed a scheme of Mega Investment Textiles Parks (MITRA). This scheme is also expected to attract large investments and boost employment generation.
“A scheme of mega-investment textile parks will be launched in addition to the PLI scheme,” Sitharaman said. She added that 7 mega textile parks will be launched in three years as part of the scheme. The mega textile parks will have integrated facilities and quick turnaround times for minimizing transportation losses, eyeing big-ticket investments in the sector.
“The announcement on Mega Investment Textiles Parks (MITRA) will be a game-changer for the Indian Textiles Industry. Along with the Production Linked Incentive (PLI) scheme, MITRA will lead to increased investments and enhanced employment opportunities. Emphasis on state-of-the-art infrastructure through MITRA will give our domestic manufacturers a level-playing field in the international textiles market & pave the way for India to become a global champion of textiles exports across all segments,” tweeted Smriti Z Irani, Union Cabinet Minister for Textiles and Women & Child Development.
Mentioning the need to rationalize duties on raw material inputs to man-made textile, the Finance Minister has also announced bringing nylon chain on par with polyester and other man-made fibers. Announcing uniform deduction of the BCD rates on caprolactam, nylon chips, and nylon fiber and yarn to 5 per cent, the Minister said that the move will help the textile industry, MSMEs, and exports too.
Import Duty on Cotton Raises Eyebrow
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