Budget 2021: The textile industry welcomes the establishment of 7 textile mega-parks

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The textile industry has welcomed the creation of 7 mega textile parks proposed in the Union budget 2021-2022, saying this will make the industry competitive on a global scale, but the imposition of a tariff of 10 percent base (BCD) on raw cotton will increase the domestic price.

“The Mega Investment Textiles Parks (MITRA), under which seven textile parks will be created over a period of three years, is a positive step that will allow the industry to become competitive on a global scale, to attract significant investments and spur job creation, ”Cotton Textiles said. The Chairman of the Export Promotion Council (TEXPROCIL), Manoj Patodia, said.

He said the budget proposed to reduce the base tariff on caprolactam, nylon chips and nylon fibers and yarns to 5 percent, which will encourage the growth of the artificial fibers (MMF) sector, especially MSMEs.

However, Patodia expressed concern over the imposition of 10 percent BCD on raw cotton, which would make imports of extra-long staple cotton, especially Giza cotton from Egypt and Supima cotton costly. the United States.

The president of TEXPROCIL also said that imposing import duties on cotton will increase domestic prices.

The President of the Indian Garment Manufacturers Association (CMAI) Rajesh Masand also said that the 7 mega textile parks were the highlight of the budget having a direct impact on the textile industry.

This is in line with the government’s intention to encourage megaprojects and increase the scale of operations in the textile industry, he said. The incorporation of the plug-and-play model will allow members of these parks to avoid huge capital expenditure.

Masand also said that lack of scale has been the bane of our efforts to increase industry’s share in global trade, especially in the clothing sector.

“However, the government also needs to take a close look at why the textile parks have not really been successful in the past. It is crucial to avoid errors of omission and commissions in the past.

“Otherwise, it will remain one more well-intentioned plan, which will not improve the fortunes of the textile industry,” he added.

Masand also said that the increase in import duties on cotton and cotton lint came at a time when the industry is reeling from an unprecedented rise in the prices of raw materials, especially yarn. , and could send the wrong signal.

Crisil (Textiles) Research Director Hetal Gandhi said the establishment of 7 mega textile parks would help Indian textile exporters improve their global competitiveness compared to countries like Vietnam and Bangladesh by giving them access to sophisticated infrastructure and facilities.

“India’s share of RMG (ready-made clothing) exports to the US and EU has remained almost stable at 4-6%, while that of competitors has improved over the past 5 years. “, she added.

Gandhi said the establishment of textile parks as well as the production-related incentive program for technical textile producers and MMF will help garment exporters to increase their export share in world markets in the medium term.

Jayanta Roy, Senior Vice President and Group Head of Icra (Sector Ratings), said that by addressing some of the existing infrastructure and cost inefficiencies that domestic players face, it could allow India to gain a larger share of the world clothing trade.

The 2021 Union budget announced a mega textile investment program, which aims to create global export champions by creating seven textile parks across the country, with plug-and-play facilities, he said. note.

“The announcement comes at an opportune time, as significant opportunities are available in global markets, due to the growing emphasis on diversifying the supplier base beyond China,” he said. added.

Welspun India Deputy Managing Director and CEO Dipali Goenka said the budget is encouraging and growth oriented and supports the realization of the “Aatmanirbhar Bharat” vision and fuels the post-pandemic recovery.

“We expect a surge in consumer confidence with the fiscal boost on inclusive human capital development, infrastructure development and universal health care,” she said.

Goenka added that the announcement of the establishment of 7 textile parks over the next 3 years, in addition to the recent PLI program for technical textiles and synthetic fibers, promises to strengthen the global leadership of Indian textiles.

“The budget is proving to be a powerful catalyst for the empowerment of women in the country, with the measures announced by the Minister of Finance Nirmala Sitharaman which encourage women to work nights in all sectors, with adequate security,” she added.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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