India must focus on the sectors in which India has competitive edge over other countries and address the problems faced by the various stakeholders so that country’s exports can grow. This was stated by Union Minister of Commerce and Industry, Shri Piyush Goyal at the review meeting on Production Linked Incentive Scheme, one of the notable initiatives for making India “Aatmanirbhar’ in the manufacturing sector.
Shri Goyal urged the need for becoming self-reliant in the key sectors covered under the PLI Scheme. Emphasizing that the Ministries should focus on creating quality skilled manpower instead of focusing on the quantity and resolve infrastructure bottlenecks in collaboration with NICDC, Shri Goyal stressed on preparing a roadmap for the next five years both on investment and disbursement.
The meeting was attended by all the concerned Ministries.
The PLI Scheme is under various stages of implementation in 14 key sectors. The scheme has witnessed investments worth Rs. 1.76 lakh crores, which has generated production/ sales of over Rs. 16.5 lakh crore and employment of over 12 lakhs (Direct & Indirect) till March 2025. Cumulative incentive amount of Rs. 21,534 crore has been disbursed under PLI Schemes for 12 Sectors viz. Large-Scale Electronics Manufacturing (LSEM), IT Hardware, Bulk Drugs, Medical Devices, Pharmaceuticals, Telecom & Networking Products, Food Processing, White Goods, Automobiles & Auto components, Specialty Steel, Textiles and Drones & Drone Components.
The impact of PLI Schemes has been significant across various sectors in India. These schemes have incentivized domestic manufacturing, leading to increased production, job creation and a boost in exports. Some of the notable sectors are as follows:
Textiles: Exports of Indian Man-made Fibre (MMF) Textiles have reached US$ 6 Billion during FY 2024-25 as against exports of US$ 5.7 Bn. during the FY 2023-24. The overall exports of Technical Textiles from India reached US$ 3,356.5 million during FY 2024-25 as against exports of US$ 2,986.6 million during FY 2023-24.
Source: PIB
GST rate rationalisation tops companies' list of demands Businesses in India want simpler GST and fewer tax slabs. A Deloitte survey reveals that sectors like healthcare seek rate rationalisation. Most companies now trust the GST system. They find interstate trade easier due to e-way bills. Digitalisation and responsive tax policies drive this confidence. Companies benefit from input tax credit and standardised processes.
Source: The Economic Times
India's PLI schemes show strong results. Investments reach Rs 1.76 lakh crore. Production exceeds Rs 16.5 lakh crore. Over 12 lakh jobs are created by March 2025. Incentives of Rs 21,534 crore are disbursed across sectors. Focus is now on sectors with competitive advantages. The schemes boost exports and domestic value addition. MSMEs also benefit significantly from the initiative.
Source: The Economic Times
India has extended the export obligation period for imports of viscose staple fibre (VSF) exempted from the Quality Control Order (QCO) to 18 months, following consistent demands from the textile industry. The move is expected to ease the burden on exporters who import QCO-exempted VSF and are required to re-export the same. The Confederation of Indian Textile Industry (CITI) has welcomed the decision. According to industry sources, the government has allowed Export Oriented Units (EOUs), Special Economic Zone (SEZ) units, and Advance Authorisation holders to import VSF without adhering to the QCO under pre-import conditions. Under the Advance Authorisation scheme, exporters are typically granted 18 months to re-export duty-free imported raw materials. While this timeline was initially applied to QCO-exempted imports as well, it was later shortened to 180 days.
Exporters had urged the government to restore the original 18-month period. Responding to the appeal, the government has now agreed to reinstate the extended timeline.
Source: India Sea trade News
The Central Board of Direct Taxes (CBDT) is expected to soon announce guidelines clarifying the tax treatment of foreign-owned data centres operating in India but is unlikely to offer any relief from existing norms, according to a Moneycontrol report.
“Foreign companies who operate data centres (DCs) have approached the CBDT in recent months. We might issue a circular soon. However, it’s unlikely there would be any change in how their incomes are taxed from the current practice,” a CBDT official told the publication.
Foreign firms seek easier entry into Indian market
As reported by Business Standard last month, several foreign firms—particularly major US cloud service providers—have urged New Delhi to facilitate easier and faster access to India’s data centre market. Their demands, made during bilateral trade agreement (BTA) discussions, include streamlined access to land and power, tax incentives, and exemptions on import duties for critical infrastructure such as switches and switchgear
Currently, foreign companies that operate or lease DCs in India may face a corporate tax rate of 35 per cent, in contrast to 22 per cent for domestic firms.
New regime for remotely managed data centres likely
The forthcoming circular is expected to clarify how income from such data centres will be taxed, especially when the facilities are physically based in India but managed remotely from abroad. “If those companies are earning profits through providing services, ideally, a 35 per cent tax rate should apply,” another official was quoted as saying.
Clear tax rules critical for investor confidence
Companies in the data infrastructure space have been awaiting formal tax clarity, particularly as India pushes for data localisation and increased digital infrastructure investment. While state governments have extended certain incentives to data centres, the lack of a central tax framework remains a key concern for global investors. The report also cited an industry executive who said that while government incentives are welcome, long-term investment depends on clearer and more predictable central tax rules. The upcoming circular is expected to define when a foreign company’s DC operations in India constitute a taxable presence, and how the profits from such operations will be attributed and assessed.
Source: Business Standard
Morocco and Turkiye have agreed to step up cooperation to expand bilateral trade and address ongoing imbalances arising out of textile imports, it was announced after a free trade agreement (FTA) joint committee meeting held in Ankara recently. The announcement followed Morocco’s review of the 2006 FTA (revised five years ago), prompted by a trade deficit that has reached around $3 billion, according to Morocco's official data. This imbalance has been driven primarily by textile imports, with Moroccan manufacturers heavily reliant on Turkish fabric.
Both sides reached a consensus to elevate their trade volume beyond the current $5 billion, guided by the principle of ‘win-win cooperation’, Turkish deputy trade minister Mustafa Tuzcu said. The FTA forms the foundation of economic ties between the two nations, pointing to the increasingly active role Turkish firms are playing in Morocco’s investment landscape. “Our companies are becoming stronger actors in Morocco’s improving investment environment,” he noted. Turkish investments in Morocco now exceed $1 billion, with contractors having completed infrastructure projects worth $4.3 billion to date, Tuzcu was cited as saying by Turkish media reports. When the FTA was last revised, Morocco had imposed a 90-per cent tariff on Turkish textile and clothing products to safeguard local producers and preserve jobs. Despite the measure, Moroccan companies continue to import Turkish textiles due to limited local production. Omer Hjira, Morocco’s deputy minister of foreign trade, said the aim is to increase Morocco’s exports to Turkiye, while encouraging more Turkish investment in the former.
Source: The Economic Times
Assuming that high US tariffs take effect in the third quarter (Q3) this year, economic growth in Vietnam is projected to slow to 5.4 per cent in 2025 and decelerate further in 2026, according to the International Monetary Fund (IMF). However, if global trade tensions subside, the economic outlook would significantly improve, the IMF said after one of its teams recently concluded the 2025 Article IV consultation with Vietnamese authorities. “The outlook is heavily dependent on the outcome of trade negotiations and is constrained by elevated global uncertainty on trade policies and economic growth,” the IMF team leader Paulo Medas noted. Downside risks are high. A further escalation in global trade tensions or a tightening of global financial conditions could weaken further exports and investment. Domestically, financial stress could re-emerge from tighter financial conditions and high corporate indebtedness,” he said. “On the upside, achieving non-discriminatory trade agreements and successfully implementing planned infrastructure and structural reforms could significantly boost medium-term growth,” he said. “Given the uncertain outlook, policy priorities should focus on preserving macro-financial stability while navigating economic adjustments. Fiscal policy, supported by low level of public debt, should take the lead in cushioning the near-term impact, especially under downside scenarios. Accelerated implementation of public investment and strengthening social safety nets would be important,” medas observed. “Monetary policy has much more limited room and should be decisively focused on anchoring inflation expectations. Allowing the exchange rate flexibility will be critical as the economy adjusts to the external shock. Some monetary easing could be considered if global interest rates decline as expected and inflation falls,” he noted. “Further efforts are needed to strengthen financial sector soundness. To bolster banking system resilience, priorities include strengthening bank supervision, build liquidity and capital buffers, and further improving the bank resolution framework,” he added.
Source: Fibre2fashion
