The Man-Made and Technical Textiles Export Promotion Council expects various proposals announced in the Budget to improve business sentiments and boost employment generation. The textile industry as a whole will benefit from various proposals but urged the government to correct the inverted duty structure in GST hampering the industry, said MATEXTIL.
The Budget proposal of Credit Guarantee Scheme to enable MSMEs to get term loans for the purchase of machinery and equipment without collateral or third-party guarantee will bring in a major relief for the industry. MATEXTIL appealed to the Government to rectify the inverted GST structure in the manmade fibre industry. Man-made fibres are taxed 18 per cent while the key raw material yarn attracts 12 per cent. The industry body urged the Government to reduce the GST rate on plastic bottles from 18 per cent to 5 per cent. Pet plastic bottles (polyethylene terephthalate) are used to make fabrics and clothes.
Bhadresh Dodhia, Chairman, MATEXTIL (formerly SRTEPC) said the Budget for this fiscal is growth-oriented as it focuses on crucially important areas such as employment generation, skill development and investments. The proposal to introduce employment-linked incentives and skilling programmes will lead to job creation in the textiles industry and clothing sector, he said. While the outlay for RoDTEP (Remission of Duties and Taxes on Exported Products) and RoSCTL (Remission of State and Central Taxes and Levies) schemes have been increased, Dodhia urged the Government to increase the rates under these schemes for textiles and clothing.
The proposal to provide internship opportunities for one crore youths in top companies over five years will help the labour-intensive industry.
The Budget has reduced customs duties on Methylene Dipheaye isocyanate (MDI) to 5 per cent from 7.5 per cent and reduced the production cost. MDI is used in the manufacture of Spandex Yarn for production of textile garments and technical textiles.
Source: Business Line
The Union Budget for 2024-25 was announced by the Hon’ble Union Finance Minister Smt. Nirmala Sitharaman on July 23, 2024 Welcoming the Budget, Shri Bhadresh Dodhia, Chairman, MATEXIL ( Man-Made and Technical Textiles Export Promotion Council ) - ( Formerly SRTEPC) said "the Union Budget for 2024-25 is growth oriented , pragmatic and progressive as it focus on crucially important areas such as Employment generation , Skill development and Investments". The Budget propose to introduce Employment linked incentives and Skilling programmes which will certainly lead to job creation in manufacturing in the Textiles and clothing Sector, according to Shri Dodhia. The Budget has proposed a Credit Guarantee Scheme to the MSMEs to enable them to get term loans for purchase of machinery and equipment without collateral or third party guarantee. Shri Bhadresh Dodhia pointed out that getting credit facilities from the banks for business operations have always been a challenge for the MSMEs and the Credit Guarantee Scheme announced in the Budget will encourage the growth and development of the MSMEs.
The Chairman MATEXIL appreciated the Budget proposal to provide internship opportunities for youths in top Companies to 1cr youth in 5 years. The budget has reduced Customs duties on Methylene Dipheaye isocyanate (MDI) -used in the manufacture of Spandex Yarn from 7.5 to 5%. Spandex yarn is used widely in the production of textile garments and technical textiles and this duty reduction will reduce production cost, pointed out Shri Dodhia . The budget outlay for RoDTEP and RoSCTL Schemes has been increased. Shri Bhadresh Dodhia urged the Government to increase the rates under these schemes for textiles & clothing.
The Chairman, MATEXTIL appealed to the Government to rectify the inverted duty structure in GST in the case of manmade fibre textiles and to reduce the rate of GST rate on plastic bottles from 18% to 5% . Shri Bhadresh Dodhia expressed his confidence that the announcements in the Union Budget for 2024-2025 will lead to improvement in business sentiments and overall development of the Country including employment generation.
Source: Press Release
The budget allocation for the textiles sector has been increased by ₹974 crore to ₹4,417.09 crore in the Union Budget 2024-25.
The budget, presented by Union Finance Minister Nirmala Sitharaman on Tuesday, raised the allocation for research and capacity building in the sector to ₹686 crore from ₹380 crore.
It also proposed reducing the basic customs duty (BCD) on real down-filling material derived from ducks or geese to enhance the competitiveness of Indian leather and textile exports.
The allocation for the National Technical Textiles Mission jumped 120.59% to ₹375 crore from ₹175 crore in 2023-24. Technical textiles are special textile products designed mainly for their performance and functionality. They are used in various sectors, such as construction, agriculture, aerospace, automotive, healthcare, protective gear, and home care.
Unlike traditional textiles, which focus on looks, technical textiles offer superior performance. They are made from both natural and synthetic fibres such as Nomex, Kevlar, Spandex and Twaron.
Currently, India exports technical textiles, including medical apparel, worth about $2.5 billion and aims to increase it to $10 billion in the next five years.
The National Handicraft Development Programme has seen a 38% jump in its allocation to ₹236 crore from ₹171 crore.
“The increased funding is expected to support various initiatives aimed at enhancing artisans' skills, improving their market access, and fostering innovation in traditional handicrafts,” said Abhash Kumar, assistant professor of economics at Delhi University.
Budget allocation for silk promotion rose to ₹900 crore from ₹875. India is the world's second-largest producer of silk and its sericulture, or silk production, industry employs an estimated 9.2 million people in rural and semi-urban areas. But it also imports silk from several nations given the high domestic demand for this costly fabric.
Source: Mint
To enhance the competitiveness of exports in the leather and textile sectors, in her Budget 2024-25, Finance Minister Nirmala Sitharaman proposed to reduce the basic customs duty (BCD) on real down filling material from duck or goose.
She also announced making additions to the list of exempted goods for manufacture of leather and textile garments, footwear and other leather articles for export. Further, to rectify inversion in duty, she proposed to reduce BCD, subject to conditions, on methylene diphenyl diisocyanate (MDI) for manufacture of spandex yarn from 7.5 to 5 per cent.
She also proposed to simplify and rationalize the export duty structure on raw hides, skins and leather.
To incentivise skilling, the minister announced a new centrally sponsored scheme, as the scheme under the Prime Minister’s package, for skilling in collaboration with state governments and Industry. Under the scheme, 20 lakh youth will be skilled over a 5-year period. In addition, 1,000 Industrial Training Institutes (ITIs) will be upgraded in hub and spoke arrangements with outcome orientation. Course content and design will be aligned to the skill needs of industry, and new courses will be introduced for emerging needs
The budget provides special attention to MSMEs and manufacturing, particularly labour-intensive manufacturing. “We have formulated a package covering financing, regulatory changes and technology support for MSMEs to help them grow and also compete globally, as mentioned in the interim budget,” Sitharaman said in her Budget speech in Parliament today.
For facilitating term loans to MSMEs for purchase of machinery and equipment without collateral or third-party guarantee, a Credit Guarantee Scheme will be introduced. The scheme will operate on pooling of credit risks of such MSMEs. A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to ₹100 crore, while the loan amount may be larger. The borrower will have to provide an upfront guarantee fee and an annual guarantee fee on the reducing loan balance.
In order to revise the assessment model for MSME credit, public sector banks will build their in-house capability, instead of relying on external assessment. They will also take a lead in developing or getting developed a new credit assessment model, based on the scoring of digital footprints of MSMEs in the economy. “This is expected to be a significant improvement over the traditional assessment of credit eligibility based only on asset or turnover criteria. That will also cover MSMEs without a formal accounting system,” Sitharaman said.
She also announced a new mechanism for facilitating continuation of bank credit to MSMEs during their stress period. “While being in the ‘special mention account’ (SMA) stage for reasons beyond their control, MSMEs need credit to continue their business and to avoid getting into the NPA stage. Credit availability will be supported through aguarantee from a government promoted fund,” she said.
To enable MSMEs and traditional artisans to sell their products in international markets, ECommerce Export Hubs will be set up in public-private-partnership (PPP) mode. These hubs, under a seamless regulatory and logistic framework, will facilitate trade and export related services under one roof.
The government will facilitate development of investment-ready “plug and play” Industrial Parks with complete infrastructure in or near 100 cities, in partnership with the states and private sector, by better using town planning schemes. Twelve industrial parks under the National Industrial Corridor Development Programme also will be sanctioned.
Rental housing with dormitory type accommodation for industrial workers will be facilitated in PPP mode with VGF support and commitment from anchor industries.
“The rules and regulations for Foreign Direct Investment (FDI) and Overseas Investments will be simplified to (1) facilitate FDIs, (2) nudge prioritisation, and (3) promote opportunities for using Indian Rupee as a currency for overseas investments,” she added.
Source: Fibre2fashion
Surat: The textile industry in Surat is disappointed with the lack of announcements for the sector in the Despite raising several demands, none of them were addressed, leaving the industry dissatisfied. Vijay Mevawala, president of SGCCI, said, “The textile industry’s demand related to the quality control order (QCO) in specialty yarn should be resolved. We were hoping for an announcement related to Yarn Bank. In fact, the government should introduce QCO on imported fabric to boost local industries.” Ashok Jirwala, president of FOGWWA, emphasized the need for a scheme like TUF to improve exports, compete globally, and create employment. He said, “For the growth of the textile sector, to improve exports, to compete globally, and to create employment, a scheme like TUF is needed urgently. We can produce export-quality fabric only if we have the required quality machinery, which is not manufactured in India.” From the Pandesara Weavers Cooperative Society, Ashish Gujarati pointed out that despite being the second-largest employment generator after agriculture, the textile sector received no significant attention in the budget. He also mentioned the challenges faced by the industry in Gujarat due to the absence of a textile policy. The textile industry delegation recently met with central ministers and the Gujarat chief minister to discuss their concerns, but no announcements were made regarding their demands. Gujarati added that without policy and incentive schemes like TUF, new investments are not coming, which may hamper the industry’s growth. Another major demand, changes and postponement of the payment time limit under IT Act 43B(h), was not addressed. This issue heavily impacted textile traders in the city, causing them to suffer business losses. Several textile traders expressed their anger and disappointment on social media platforms.
Source: Times of India
The Tiruppur Exporters’ Association (TEA), the Southern India Mills’ Association (SIMA), and the Indian Cotton Federation (ICF) signed agreements with the Madhya Pradesh government on Thursday. The SIMA and the ICF plan to work with the Madhya Pradesh government to promote cultivation of Extra Long Staple (ELS) cotton. J. Thulasidharan, chairman of the ICF, said Madhya Pradesh grows the finest variety of ELS in the country and there is good demand for it from textile mills in Tamil Nadu. The Federation will help Madhya Pradesh develop cotton acreage and yield and also set up a Cotton Development Board. The SIMA will set up demonstration farms for some of its cotton seeds and take it up for commercial distribution too. The TEA will facilitate the establishment and expansion of garment manufacturing units in Madhya Pradesh and promote investment opportunities for the garment industry there. It will also work on skill development facilities there, and offer consultancy, support to set up plug and play facilities, and promote assistance for planning of garment clusters
Source: The Hindu
Chennai: Higher cotton and synthetic fibre prices in India compared to the international rates are working against yarn producers and making Indian textile products less competitive in the global market. After remaining elevated in the June quarter, domestic fibre prices are 24 and 48 per cent higher than international rates in July. Cotton fibre prices at the MCX have remained higher than the Intercontinental Exchange (ICE) prices in the June quarter. In May, the price differential was 13 per cent and it further widened to 15 per cent in May and 22 per cent in June. By the mid-week of July, the price difference between MCX cotton and ICE cotton prices rose to 24 per cent. Similarly, polyester staple fibre prices in India were 32.7 per cent higher than that in China in April, 32.9 per cent in May and 39 per cent in June. Viscose Staple Fibre prices were 11.8 per cent higher in April, 15.8 per cent in May and 19 per cent in June. By the third week of July, PSF prices were higher by 45.5 per cent and VSF prices had a differential of 20.5 per cent. “This price differential is making the Indian yarn and value-added products less competitive in the international market,” said Sanjay Jain, MD of TT Textiles. According to him, the Quality Control Order issued by the Bureau of Indian Standards is not giving quality approval to Chinese fibre to enter the market and this has created a shortage, leading to higher prices in the domestic market. “QCO should be suspended on fibre and yarn till it is not equitably imposed on value-added fabric and garments. It is regressive to stop raw material imports to promote value-added imports,” he said. While this is affecting the competitiveness of Indian goods, local producers also have a disadvantage due to preferential duty arrangements enjoyed by competitors like Bangladesh, Vietnam, Sri Lanka and Pakistan in major markets like Europe.
Source: Deccan Chronicle
India’s textile sector is poised for growth with a 28 per cent increase in the Budget allocated for the sector for 2024-25, said Northern India Textiles Mills Association (NITMA ) President Sanjay Garg on Wednesday. This significant boost in funding is expected to drive innovation, enhance productivity, and create new opportunities for the textile industry in India. The increased investment underscores the government’s commitment to supporting the growth and development of the textile sector, which plays a crucial role in the country’s economy, he said. With this increased Budget allocation, the textile sector is well-positioned to capitalise on emerging trends and capitalise on new opportunities in the global mark Garg emphasised that employment, skilling, and MSMEs are the key focus areas of the Union Budget. He highlighted the announcements made in these areas will greatly benefit the labour-intensive textile industry. He commended the introduction of the Credit Guarantee Scheme for MSMEs, which includes provisions for term loans to purchase machinery and equipment without the need for collateral or third-party guarantee, with coverage up to Rs 100 crore, potentially even larger loan amounts. The increase in the credit guarantee scheme limit is anticipated to stimulate investment in the textile sector. The Budget allocations for cotton procurement, the Amended Technology Upgradation Fund Scheme for the National Technical Textiles Mission, and enhanced funding for PM MITRA will also provide the necessary support to the textile sector, he added.
Source: The Statement
Complex and archaic procedures of the Directorate General of Foreign Trade (DGFT) and the customs department; import restrictions, domestic vested interests and difficulty in obtaining quality raw fabric, particularly synthetic ones, are affecting export growth of the Indian garment sector, according to the Global Trade Research Initiative (GTRI). While exporters in Bangladesh and Vietnam easily access quality imported fabrics, Indian exporters struggle daily, Ajay Srivastava, who founded the New Delhi-based think tank, said. Mandatory quality norms related to raw materials like polyester and viscose staple fibres is complicating imports as the Bureau of Indian Standards slowly registers foreign suppliers, and this delay compels exporters to buy from domestic monopolies at higher prices, a GTRI report said. DGFT norms require exporters to meticulously account for every square centimetre of fabric, buttons, and zippers used. Therefore, there is an urgent need for a comprehensive overhaul and the production-linked incentive (PLI) scheme for the textiles sector also needs modification, the report said. Companies obtain advance authorisation from DGFT for importing duty-free inputs for export production, and the DGFT now mandates that unutilised authorisations surrendered to them must be accompanied by a non-utilisation letter or certificate from the customs department. This raises transaction costs and involves additional effort for the authorisation holder, and the customs department is often reluctant to issue such letters, causing delays, the report noted. Further, the DGFT system allows up to 500 characters to describe export items in an authorisation, but the customs shipping bill only allows 120 characters. This mismatch leads to incomplete descriptions being visible to DGFT. As a result, DGFT asks exporters to obtain attested invoices or shipping bills with full descriptions from customs, which the customs department does not entertain. Several firms have pending closures at DGFT due to this issue, despite completing both imports and exports, it said. GTRI urged DGFT to issue import entitlements in value terms the way Bangladesh does, instead of looking into actual consumption of the inputs as DGFT input consumption norms are over 25 years old and fashion changes frequently, affecting the pattern of consumption of fabric and other inputs and making old norms impractical, a news agency reported. Additional wastage should also be allowed for advance authorisation if the garment design warrants that. DGFT requires Export Promotion Capital Goods (EPCG) scheme authorisation holders to submit an annual report on the fulfilment of their export obligation by June 30 each year. After submission, these reports need approval from DGFT. Until the report is approved, the authorisation holder cannot make other requests. GTRI suggested elimination of these annual reports as DGFT already receives details of every import-export shipment from ICEGATE, making annual reports redundant.
Source: Fibre2fashion
Surat: The textile trade in the city is suffering a daily loss of over Rs 100 crore due to flooding in areas around Kadodara road since Monday. The flooding has impacted the business in at least 20 textile markets, while operations of 200 transport firms have come to a grinding halt. Businesses fear it will take a couple of more days for the floodwaters to completely recede and for market operations to return to normalcy. Thousands of daily wage workers have also suffered a loss of income. Water has entered into the textile markets in Saroli. While many markets did not experience direct water ingress, the connecting roads are submerged. Textile traders claim that the actual loss of goods is yet to be calculated. Once the water recedes, the damage to goods and property will be assessed in the shops and warehouses where the products were stored. “Due to waterlogging, our entire market is closed, and we are suffering huge losses. Goods in many shops are under water. Almost every year we face flooding, but there is no solution to the problem,” said Kapil Arora, president of DMD Market. Workers have been unable to reach the markets due to flooding in residential areas or on the connecting roads. Transportation is also unavailable due to submerged roads. “The connecting roads to our market are flooded. A few traders managed to reach, but business operations will not be normal until the water completely recedes. We expect that the authorities will improve road conditions and control the flooding,” said Vishal Bansal, a textile trader from RKLP Market. “There is a major loss of business in the markets operating in Saroli and Kadodara road. I visited the area to understand the issues. There is a need for a permanent solution to the problem,” said Kailash Hakim, president of the Federation of Surat Trade and Textile Associations (FOSTTA). “Even if I manage to reach the office, what will I do without power? The electricity supply has been disconnected due to flooding. Almost all markets in these areas are closed. Authorities are taking steps to prevent loss of lives, but there is no permanent solution,” said Sunil Jain, chairman of the South Gujarat Textile Traders Association.
Source: Times of India
The stakes are high for Vietnam’s garment and textile sector as key exports markets and competing producer markets intensify their push for green targets, influencing brand appeal to consumers and sourcing decisions by global fashion retailers. According to the Vietnam Textile and Apparel Association (VITAS), as of the end of May 2024, Vietnam’s textile and garment sector had attracted over US$37 billion in foreign direct investment (FDI). This substantial inflow underscores the sector’s potential, particularly as global markets shift towards sustainable development.
Vietnam textile and garment businesses are now compelled to strategize a green transition to ensure they retain competitiveness in the global fashion and textile market, which has doubled down on the pivot to sustainability. Maintaining unrestricted market access may hinge on adopting green practices and improving the environmental, social, and governance (ESG) profiles of suppliers.
Source: Vietnam Briefing
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) recently requested the government to waive demurrage charges at ports due to delayed delivery of goods over the last few days as businesses could not conduct export-import activities in the last week due to an internet blackout and countrywide curfew It also requested not to impose any new charges in the next 15 days till normalcy returns to shipment and import clearance activities at the ports. Businesses need government support to minimise the loss, FBCCI president Mahbubul Alam said in a statement. The Chattogram port has been witnessing container congestion amid problems in duty assessment by the customs authority and payments of bills at banks in the absence of internet since July 18 night. Bangladesh Garments Manufacturers and Exporters Association (BGMEA) president SM Mannan Kochi said the readymade garments sector saw a loss of around Tk 80 billion following the internet blackout and curfew. Production in many factories has been hampered due to delayed shipment of raw materials, he was cited as saying by domestic media reports.
Source: Fibre2fashion
