Textile industry demands policy changes to regain competitiveness

As the new government settles in, the Indian textile industry is calling for urgent action to revive sluggish exports and stimulate growth. Industry leaders are urging the government to prioritize the expansion of the fabric and garment sector, which they see as crucial for the overall development of textiles in India. Rakesh Mehra, Chairman of the Confederation of Indian Textile Industry (CITI), specifically recommends a policy shift regarding quality standardization. He proposes that Quality Control Orders (QCOs) focus on finished products like garments and home furnishings instead of raw materials like fiber and yarn.

Mithileshwar Thakur, Secretary General of the Apparel Export Promotion Council (AEPC), emphasizes the need for a revised production-linked incentive (PLI) scheme. He suggests tailoring the scheme for man-made fiber (MMF) fabrics, garments, trims, and embellishments with a lower investment threshold to allow participation by smaller manufacturers.

Thakur also highlights the potential of e-commerce to drive textile exports. He proposes policy adjustments to cater to the specific needs of online commerce, including the removal of customs duties on imported textile machinery to facilitate faster and more affordable industry modernization. Additionally, Thakur recommends streamlining MMF fabric import processes to strengthen the MMF apparel export ecosystem and highlights the need for enhanced skill development programs for textile workers.

Ashish Gujarati, Former President of the South Gujarat Chamber of Commerce and Industry (SGCCI), echoes the call for a review of quality control orders. He argues that current policies focused on raw materials are hindering value addition and making Indian textiles less competitive against cheaper imports. Gujarati also advocates for the reinstatement of the Technology Upgradation Fund (TUF) scheme, particularly for micro and small industries, which are major job creators.

The industry is further pushing for an immediate extension of the interest equalization scheme, which is set to expire at the end of June 2024. This scheme, launched in 2015, offers a 3 per cent subvention to MSME exporters and 2% for others. With rising interest rates, the industry is also requesting an increase in the subvention rate.