NE NEWS SERVICE
COIMBATORE/MUMBAI, FEB 1
The textile industry welcomed the setting up of 7 mega textiles parks proposed in the Union Budget 2021-22, saying this will make the industry globally competitive, but the imposition of a 10 percent basic customs duty (BCD) on raw cotton will increase the domestic prices.
#AatmanirbharBharatKaBudget 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.
— Smriti Z Irani (Modi Ka Parivar) (@smritiirani) February 1, 2021
In a statement here, the Indian Texpreneurs Federation (ITF) appreciated the thrust given to the textile sector by proposing the seven mega integrated textile region and apparel parks (MITRA). With the concept of the parks with a plug-and-play model, the textile and apparel sector, particularly the SMEs (small and medium enterprises), can build competitiveness in manufacturing, ITF convenor Prabhu Dhamodharan said in the statement.
Govt under PM @NarendraModi ji will launch a scheme of Mega Investment Textiles Park to enable textile industry to become competitive, attract investments & boost employment.
7 textile parks will be established to create global export champions. #AatmanirbharBharatKaBudget pic.twitter.com/e9nDYvgYYk
— Piyush Goyal (मोदी का परिवार) (@PiyushGoyal) February 1, 2021
Further, the parks can be aligned with environmental, social and governance goals to attract international buyers as well as investors, he said. Also lauded was the mention of a three-year period to capitalise the opportunities emerging from China and Tamil Nadu with a robust manufacturing ecosystem, he said.
Really a big announcement.this will bring much needed scale and within 3 year timeframe is very good. https://t.co/7hJTZ1GZDV
— ITF Texpreneurs (@texpreneurs) February 1, 2021
Welcoming the budget, president of Tirupur Exporters Association Raja M Shanmugham termed it as a pragmatic one presented to address all issues in the sectors. While appreciating the parks scheme, he said as expected, this would create global champions in exports and was hopeful that Tirupur exporters would opt to set up the units in the parks.
He thanked the government for allotting Rs 700 crore for the Amended Technology Upgradation Scheme (ATUFs) against Rs 545 crore in the last budget which, he said, would help clear the pending capital subsidy. Also, he appreciated the allocation of Rs 30 crore for export promotion studies against Rs 5 crore in the last Budget, a requirement of the industry to know the export potential of specified products in the unexplored markets.
Raja Shanmugham expressed happiness over the allocation of Rs 100 crore for the integrated scheme for skill development. On rationalisation of duties on raw material for man-made textiles, Dhamodharan and Raja Shanmugham welcomed the reduction of the basic customs duty on nylon chips, nylon fibre and yarn.
Shanmugam was thankful for allowing new tax exemption for the notified affordable rental housing projects, which was requested by the association in the pre-Budget memorandum to support migrant workers. He was all-praise for allowing women to work on night shifts with adequate protection.
The Southern India Mills Association (SIMA) wanted the Prime Minister to withdraw the levy of 10 percent import duty on cotton and cotton waste to sustain global competition.
The duty would not benefit the cotton farmers as the normal import of 12 to 14 lakh bales per year accounts only around 3 per cent of the cotton production in the country. After the introduction of BT cotton that accounts over 97 per cent of the cotton produced in the country, the cotton textile industry has to import organic cotton, contamination- free cotton to the tune of 10 to 12 lakh bales per year to meet the demands of the global customers, the association said.
SIMA chairman Ashwin Chandran said the country was already flooded with cheaper imports of readymade clothes from SAFTA (South Asian Free Trade Area) countries and was facing a crisis. He said the government had withdrawn the import duty on cotton in July 2008 consequent to the recession in the industry. The chairman further said when the duty was in force, multinationals used to cover major volume of cotton and export and the industry had to import cotton at a higher price. This affected foreign exchange, therefore the Prime Minister has to take steps to withdraw the 5 percent BCD (basic customs duty) and 5 percent agriculture infrastructure and development cess (AIDC) and also 10 percent BCD on cotton waste crisis.
“The Mega Investment Textiles Parks (MITRA), under which seven textile parks will be established over three years, is a positive step that will enable the industry to become globally competitive, attract large investments and boost employment generation,” Cotton Textiles Export Promotion Council (TEXPROCIL) Chairman Manoj Patodia said.
The TEXPROCIL chairman also said the imposition of import duty on cotton will increase the domestic prices.
Clothing Manufacturers Association of India (CMAI) President Rajesh Masand also said the 7 mega textiles parks were the highlight of the Budget directly impacting the textile industry.
“However, the government also has to closely study why the textile parks have not really succeeded in the past. It is crucial to avoid errors of omission and commissions in the past.
“Otherwise, this will remain one more well-intended scheme, which fails to lift the fortunes of the textile industry,” he added.
Crisil Research Director (Textiles) Hetal Gandhi said setting up of 7 mega textile parks will aid Indian textile exporters to improve global competitiveness against countries like Vietnam and Bangladesh by providing access to sophisticated infrastructure and facilities.
“India’s share in RMG (readymade garments) exports to the US and the EU remained almost stable at 4-6 percent, while that of competitors improved during the last 5 years,” she added.
Gandhi said that setting up of textile parks along with the production-linked incentive scheme for technical textile and MMF producers will help apparel exporters to enhance export share in global markets in the medium term.
Icra Senior Vice-President and Group Head (Corporate Sector Ratings) Jayanta Roy said that addressing some of the existing infrastructural and cost inefficiencies, which the domestic players face, could enable India to garner a larger pie of the global apparel trade.
“The announcement comes at an opportune time, as sizable opportunities are available in the global markets, owing to increasing focus on diversifying the vendor base beyond China,” he added.
Welspun India Joint Managing Director and CEO Dipali Goenka said the Budget is encouraging and growth-oriented and supports the achievement of the ”Aatmanirbhar Bharat” vision, and fuels post-pandemic recovery.
“We foresee a revival of consumer confidence with the budget impetus on inclusive human capital development, infrastructure development, and universal healthcare,” she said.
“The Budget proves to be a strong enabler of women empowerment in the country, with the measures announced by Finance Minister Nirmala Sitharaman that promote women working in night shifts across all sectors, with adequate safety,” she added.
