India’s troubled textile sector isn’t likely to receive a reprieve any time soon.
While Confederation of Indian Textile Industry (CITI) chairman Prem Malik has declared the textile trade’s potential to hit $350 billion by 2025 if it diversifies to new product categories like man-made fibers, the most recent budget all but ignored the industry’s health.
Last week, Om Prakash Lohia, chairman and managing director of Indo Rama Synthetics (India) Ltd., and Madhu Sudhan Bhageria, vice chairman and managing director of Filatex India Ltd., met in New Delhi with Textile Minister Santosh Kumar Gangwar to express their concern that the excise duty on man-made fibers was upped to 12.5% from 12.36%, after rumors that it would be reduced to just 6 percent.
Lohia underscored the need for textiles to be kept in the lowest slab in GST (Goods and Services Tax; India’s biggest indirect tax reform since 1947) and stressed that if the government doesn’t help the ailing industry, which falls under the “Made in India” program, the likes of Vietnam, Bangladesh, Indonesia and Pakistan will overtake it. He also voiced his distress that China’s slowed demand for cotton and yarn has contributed to weaker garment exports since January, after recording a 16 percent rise until December this fiscal year.
Malik, meanwhile, said that in order to meet the high fiber requirements and targets set for the industry, the man-made fiber segment must be supported, which in turn would increase industrial production, generate additional employment and improve export earnings.
The Minister assured the delegation that he would look into these matters.