Textile Industry Responds to Interim Budget: Cautious optimism amidst hope for Full Budget relief

The Indian textile industry presented a mixed response to the interim budget announced today, welcoming government focus on investment and R&D while expressing concerns about slow implementation of schemes and continued financial stress. The industry seeks immediate relief for the financially stressed spinning sector and expects bolder policy announcements in the full budget to address competitiveness and growth concerns.

Key Takeaways:

• Industry appreciates increased focus on investment and R&D.
• Extension of RoSCTL scheme seen as positive for garment exports.
• Concerns remain regarding financial stress, import duty on cotton, and slow implementation of schemes.
• Full budget expected to address industry demands more comprehensively.
• Raw material structural issues remain a key concern for long-term growth.

CITI appreciates focus on investment, seeks relief for spinning sector

Confederation of Indian Textile Industry (CITI) Chairman Rakesh Mehra congratulated Finance Minister Nirmala Sitharaman for the budget, but highlighted the need for immediate relief for the financially stressed spinning sector. He noted the 27.6% increase in budget allocation for textiles, mainly due to Rs 600 crore allocated for cotton MSP operations.

Apparel industry welcomes RoSCTL extension, seeks more support

The Apparel Export Promotion Council (AEPC) Chairman Sudhir Sekhri welcomed the extension of the Rebate of State and Central Taxes and Levies (RoSCTL) scheme for apparel exports but called for increased allocation in the full budget considering the challenging global market. He commended the budget's focus on competitiveness and growth.

Industry disappointed by lack of policy changes

However, Sanjay Jain, Chairman of the ICC National Textiles Committee, expressed disappointment at the lack of major policy announcements, specifically regarding import duty on raw cotton and minimum import duty on knitted fabrics to counter Chinese dumping. He lauded the allocations towards technical textiles and R&D but stressed the need for faster implementation of existing schemes like PLI.

Interim Budget hints at future direction

“As an interim budget, it was anticipated that no significant announcements would be made, and indeed, there were no surprises. Nevertheless, the budget provided essential indicators of the anticipated direction for the July budget, emphasising key areas such as innovation, support for start-ups, sustainable development, job creation, and a dedicated focus on Women Empowerment and Domestic Manufacturing, aligning with the overarching theme of ‘First Develop India,’” says Rahul Mehta Chief Mentor, CMAI.

Full Budget expected to address key concerns

Sunil Patwari, Chairman of the Cotton Textiles Export Promotion Council (TEXPROCIL), welcomed the interim budget, stating that it "is centered around policies that will support India's economy as it continues to grow and approaches the $5 trillion mark." He particularly commended the increased allocation for the RoDTEP and RoSCTL schemes, noting that these measures will "lessen the burden of taxes and levies and provide a level playing field in the sector." However, he echoed the sentiments of other industry leaders in calling for bolder reforms in the full budget, particularly regarding raw material import duties and support for the spinning sector.

Industry leaders expressed hope that the full budget will address their concerns more comprehensively. Dr. S.K. Sundararaman, Chairman of The Southern India Mills' Association (SIMA), welcomed the overall increased allocation for textiles but urged the government to consider their demands related to raw material issues and exemptions in the full budget.