New Delhi, 23 July 2024: Congratulating the Hon’ble Minister of Finance, Shri Nirmala Sitharaman for presenting her 7th Finance Budget, Chairman of Confederation of Indian Textile Industry (CITI) cited the budget as a forward-thinking budget that addresses several key issues for the overall growth of the Indian economy.However, the stagnation in the textile and apparel industry needed some bold measures for capacity building, modernisation and cost competitiveness.

“MSME accounts for about 80% of the Indian Textile Industry. The credit assurance schemes announced today will provide the much-needed impetus to the growth of large number of textile and garment MSMEs and enable them to expand their operations and innovate.”, said Shri Mehra.

He appreciated the recognition of e- commerce as an engine for growth of trade and applauded the announcement of e-Commerce hubs. The “plug and play” industrial parks, support towards setting up of working women hostel, etc. will also pave the way for a more robust and sustainable industrial ecosystem.

The increased focus of Government towards skilling and the announcement of the Employment Linked Incentive scheme coupled with the decision of easing the FDI norms will facilitate new investments in the textile industry. Moreover, the financial support for clean energy transition, energy initiatives, and energy audits underscores the Government’s commitment to sustainable development. “We believe that these initiatives will pave the way for a more robust and sustainable industrial ecosystem”, he said.The various benefits provided through income tax relaxation will also increase purchasing power of the consumers which may translate to improved domestic demand for the textile industry.

Shri Mehra said that though” the Hon’ble Minister has addressed the need for boosting competitiveness of domestic manufacturing in her speech today, however, the downstream textile industry is suffering from non-availability of raw material, both cotton and man-made fibers at international competitive prices.” This has resulted in Indian textile industry not being able to leverage our unique strength of presence across the value chain and resulted in increased imports of value-added products over the years.

Moreover, after the expiry of the TUFS scheme in March 2022, industry has no investment incentivisation scheme for expansion or modernization. Scaling up will be critical for the survival of the industry, which has been fast losing out to our competitors largely due to lack of scales.

“With the exception of enhanced PLI scheme allocation to Rs 45 crore from earlier Rs 5 crore, there is no major announcement to address the industry’s loosing competitiveness”, Mr Mehra observed. The PLI scheme has not been able to address the investment needs of the large majority. Revival of capital subsidy schemes will be needed to ensure large-scale investments.

‘Viksit Bharat’ would need some more bold steps for the revival of this employment generating sector. “We look forward to measures to address these issues”, he said.