India’s government is poised to unveil economic incentives aimed at reviving the struggling textile and apparel sector by the close of this year. This move comes as a response to mitigating the adverse effects stemming from a decline in international orders, as stated by a representative from a trade organization on Wednesday.
These proposed incentives are anticipated to fall under the framework of the production-linked incentive (PLI) initiative. The PLI program, which encompasses diverse sectors ranging from electronics to pharmaceuticals, pledges substantial financial injections to fortify the manufacturing landscape.
Chairman of the Confederation of Indian Textile Industry (CITI), T. Rajkumar, shared insights on the matter, revealing that an official announcement from the government could be anticipated by December. This notion takes its basis from interactions between industry representatives and officials from both the textile and finance ministries earlier in the month.
In recent weeks, government officials have conducted a review of the PLI scheme. This initiative, launched in 2020, was devised to extend approximately $24 billion in monetary incentives to 14 different sectors.
The textile and apparel industry, which boasts a market value of $150 billion and employs over 45 million individuals, has been grappling with dwindling exports due to reduced consumer spending in Europe and the United States, driven by inflationary pressures.
Exports within India’s textile and apparel domain registered a nearly 14% drop, plummeting to $11.25 billion during the initial four months of the current fiscal year, spanning from April to July, culminating on March 31, 2024.
As part of their appeal to the government, representatives from the industry have advocated for fiscal incentives tailored to smaller manufacturers through the PLI framework. Additionally, they have requested the retraction of the 11% import duty on specific cotton varieties sourced from Egypt and the United States. This measure is aimed at better accommodating particular orders, as conveyed by Rajkumar.
Rakesh Mehra, President of the Indian Spinners Association, stressed the necessity of governmental support for the sector. He also highlighted the significance of forging free trade agreements with the European Union and the United Kingdom to invigorate exports.
The situation has prompted almost a third of spinning units to curtail their production, thereby escalating concerns of potential job losses, according to Mehra. He emphasized the likelihood of governmental backing for the sector, given its substantial contribution to employment, particularly in an election year.
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