At a time when the Indian garment industry is seeing rough times due to costlier raw material and global economic challenges, garment manufacturers are hoping that Budget 2023-24 will include some steps to reduce their pain and increase the industry’s competitiveness in the global market. Finance minister Nirmala Sitharaman will present Budget on February 1.
Sanjay Jain, Managing Director of TT Limited told Fibre2Fashion, “Higher cotton prices are main cause of concern for the entire textile industry. The government should remove import duty for ease in cotton prices. Secondly, the finance minister may extend benefits to garment exporters under Remission of Duties and Taxes on Exported Products (RoDTEP) scheme in case they import cotton under Advance Licence for export purpose. It will increase competitiveness in the global market. Higher cotton prices increased garment production cost, so the exporters are not in a position to offer competitive prices.” He explained that cotton imports under Advance Licence offers duty-free raw materials for exporters, but they are not entitled for incentives under RoDTEP. He said that the government should announce a new technology upgradation scheme after expiration of ATUF (Amended Technology Upgradation Fund) scheme on March 31, 2022.
Kishore Kumar Ladia, Director of Space Fashions Limited said, “The government should decide if it wants to develop domestic industry, or it will allow competitors to enjoy current market dynamics.” Currently costlier cotton is key pain point for Indian garment industry. On the one hand, the cost of production of garments have increased since last year, on the other, cheaper garments are being imported in India from China, Bangladesh and other countries. As a result, garment industries from competitor countries are enjoying present market dynamics. He urged the government to stop import of cheaper garments from other countries.
He said that the retail industry is awaiting the re-introduction of Technology Upgradation Fund Scheme (TUFS) to reduce its cost of technology upgradation, in which MSMEs are also able to participate. The National Retail Trade Policy should be expedited to provide the much-needed ‘Ease of Doing Business’ to the fashion retail industry.