ICRA: Incentize India’s Textile Investments Across The Value Chain In The Union Budget 2022
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20 January 2022, Mumbai:
To achieve its target of $100 billion textile exports in the next five years, the government needs to incentivize investments across the textile value chain the upcoming budget, says ICRA. According to the rating agency, India is currently on the cusp of a potential growth cycle in the global textile market.
Besides the US-China trade war issues, the China Plus One sourcing policy being endorsed by several large consuming regions across the globe, are fuelling this opportunity. India remains one of the potential beneficiaries of the reduction of China’s share in the global textile market.
However, the country faces challenges from other low-cost/more efficient peer nations, the evolving free trade agreement landscape with some peers already enjoying duty-free access to some of the major markets, as well as domestic issues such as infrastructure bottlenecks, says the ICRA report.
The report states, India’s also lags due to the growing shit to MMF garments and technical textiles.
Though the government has adopted several policy initiatives including the announcement of the PLI scheme, extension of the Rebate of State and Central Taxes and Levies (RoSCTL) Scheme for apparel and made-ups for three years, announcement of the Remission of Duties and Taxes on Exported Products (RoDTEP) rates for the other textile segments and notification of seven textile parks under the PM-MITRA Scheme, during the past one year, their effective implementation remains crucial, for which adequate provisioning in the Budget is necessary, adds the report.
The ICRA report also calls for the extension of the ATUFS scheme or announcement of a new scheme particularly for the downstream segments and/or for captive renewable power capacities to encourage investments and enable the companies to reduce their carbon footprint while being more cost-efficient.
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