The textile sector in India is finally showing some signs of recovery after it saw a major hit due to demonetisation, implementation of GST, rupee appreciation and high domestic cottonprices, according to the Confederation of Indian Textile Industry (CITI). Rupee depreciation, pick up of domestic demand and progressive policies are helping recovery.As per RBI Financial Stability Report - June 2018, the stressed advance ratio of textile sub-sector has improved in March 2018 from the levels of September 2017, CITI said in a press release.
Expressing his gratitude to the government for its strong support to the textile sector, CITI chairman Sanjay Jain said, “All the support extended by the government, including Rs.1,300 crore Samarth scheme for skilling, Rs 6000 crore package for Apparel & Made-ups along with various state incentives, is expected to create a strong turnaround in textiles and clothing sector and put the industry back on growth path.”
“The government has also been very receptive in resolving many GST issues, though there are still a number of issues which industry is hopeful will get resolved very soon,” Jain added.
Moreover, the embedded duties which are in the range of 4 to 6 per cent across the value chain are not getting refunded. This is one of the key factors for decline in exports apart from blockage of funds due to delay in GST refunds and rupee appreciation.
The only urgently required and missing piece in the success jig saw puzzle is the government policy support for stopping excess imports and refund of all duties and taxes on exports across the value chain, he added.
However, the biggest gamechanger that could transform the industry and put it at par with its competitors such as Vietnam and Bangladesh is the signing of Free Trade Agreements (FTAs) with the EU, Australia, Canada and Britain. The reduction of import duty on Indian cotton yarn and fabric by China would also benefit the industry.
Stating that the textiles and apparel industry is one of the unique industries, well-being of which directly impacts farmers and the labour workforce, Jain said he is very optimistic that the government would continue to support the industry.
Source: Nagpur Today, India Saturday, 30 June 2018